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’[Something for the weekend] Let’s have the FTUK index (and the T-shirt)
Goodhart’s Law, as refined, states that when a measure becomes a target, it ceases to be a good measure. Charles Goodhart coined it (the law, rather than anything else) at the Bank of England. At the time the Bank was targetting M3,
Snap news
Breaking pre-market news on Thursday,
- UBS to axe 5,000 jobs – report.
- Yell announces new strategy (to provide a broad range of digital services to SMEs) — statement.
- Premier Foods appoints Kraft executive as new CEO — statement.
Meddling Mandy lives on
The UK Takeover Panel finally published its proposed changes to the Takeover Code on Tuesday — and perhaps suitably for the post-Kraft era, they’re rather stringent.
Lord Mandelson, the former Business Secretary who inspired them,
Cadbury’s fudge (updated)
Proposals by the Labour Party to put “some grit” into the UK Takeover Code have met with a predictably furious response in the City on Monday morning.
From Financial News:
Some of the City of London’s best-known dealmakers from firms including Goldman Sachs,
Snap news
Breaking pre-market news on Monday,
- Royal Dutch Shell and PetroChina make $3.4bn offer for Arrow Energy – statement.
- Prudential to seek secondary listing on Hong Kong stock exchange – statement.
Meddling Mandy – the details
We mused last week on what suggested reforms the First Secretary of State for Business, Innovation and Skills might have made to the UK’s Takeover Panel.
And now we know, thanks to a speech the The Rt Hon Lord Mandelson has delivered at Mansion House in the City.
A grandee speaks up for Little England
To the Said Business School, Oxford, to hear departing Cadbury chairman Roger Carr talk about hostile takeover bids – a timely address, given the Kraft deal…
Carr, we can report, had clearly topped up on the theobromine ahead of his speech.
Kontrast and Kompare
Preliminary guidance for Kraft’s bond seems to be out.
The below is courtesy of Marc Ostwald at Monument Securities
Just for fun, Ostwald provides details of a new Lithuanian 10-year bond:
Paying for Cadbury
Just a day after its offer for the British chocolatier was declared unconditional, Kraft is looking to refinance the £7.1bn bridge loan it took on to fund the £11.7bn cash-and-scrip bid.
The US food company is planning a “jumbo”
Snap news
Breaking pre-market news on Wednesday,
- SAP Q4 profit falls as customers cut spending – statement.
- BBVA Q4 profit plunges 94 per cent to $44m on asset writedowns – statement.
- Tullow Oil to place new shares equal to 10 per cent of current capital -statement.
Snap news
Breaking pre-market news on Monday,
-Ferrero confirms does not intend to make an offer for Cadbury – statement.
- Kraft gives more details of its Mix and Match facility, says Cadbury shareholders can elect for 799p cash per shr – statement.
Kradbury – a ‘bad deal’
Remember those conspiracy theories about Warren Buffett being in league with Kraft to drive down the Cadbury share price?
They always seemed somewhat far fetched – and guess what? They were.
Buffett’s threat to vote against the deal was real enough.
Cadbury post-mortem
No doubt the board of Cadbury are feeling pretty pleased with themselves right now.
After all, they have just managed to extract a higher offer from Kraft, providing an exit at a 50 per cent premium to the level it was trading at the day before the first offer in September.
Krafty
If you thought Kraft shareholders might be able to derail the company’s new, improved bid for Cadbury think again.
From the Recommended Final Offer for Cadbury, unveiled on Tuesday morning:
The Final Offer does not require the approval of Kraft Foods Shareholders.
Will Hersbury happen? (Updated)
Hershey is preparing a counter-bid to Kraft’s hostile £10.4bn offer for Cadbury, according to people familiar with the matter. The US confectioner has authorised a bid for the UK chocolate maker and a formal offer could be made before the January 23 deadline,
Hersbury?
Six days to go to Kraft’s deadline for raising its bid for Cadbury, and suddenly this pops up on the Associated Press wire:
The Hershey Co. continues to work on a bid to acquire British candy maker Cadbury PLC without the help of Italian candymaker Ferrero International.
Buffett/Kraft conspiracy theories
7.5p, or 1 per cent.
That’s the gap between the Cadbury share price and the value of Kraft’s £10.4bn bid on Wednesday morning.
Which will no doubt please those conspiracy theorists (both in the media and the stockmarket) who believe Warren Buffett is in league with Kraft’s management to secure Cadbury at a knockdown price.
CDS report: Kraft’s takeover ambitions hit the buffers
Gavan Nolan of Markit wrote this CDS report
Credit outperformed equity today as European credit indices threatened to break through key resistance levels. The Markit iTraxx Europe tightened by around 1.5bp to hover around the 70bp level,
Cadbury gets creamed by Buffett…
… who also delivers an almighty slapdown to Kraft.
In early afternoon trading on Tuesday, shares in the UK confectioner were hit hard – falling over 4% to 770p
The reason? Warren Buffett, who has thrown a rather big spanner in the works.
Snap news
Breaking pre-market news on Monday,
- Kraft looks for shareholder approval to issue shares for Cadbury bid – statement.
- London Stock Exchange announces acquisition of Turquoise – statement.
- Nigerian oil minister says Shell has not informed Nigeria of any plans to sell oil fields – Reuters.
Snap news
Breaking pre-market news on Tuesday,
- Deutsche Bank says needs moderate capital market refinancing in 2010, overall loan loss provisions expected to decline in 2010 – Reuters
- “We have heard nothing that surprises us”:
Snap news
Breaking pre-market news on Monday,
- Cadbury to give formal response to Kraft’s offer on December 14 — statement.
- Shanks Group says it’s received “highly preliminary approach” from a PE firm — statement.
Cadbury encourages friendly approach from Hershey
Cadbury is expecting a “white knight” bid from Hershey if the US confectioner can arrange the financing for a takeover offer. The British firm, fending off an approach from Kraft, sees commercial logic in an alternative deal with Hershey,
Cadbury-Hershey merger: the Carnival solution
The hurdles to a Hershey-Cadbury tie-up are by now well aired.
Hershey has a smaller market cap than Cadbury, would need to take on crippling amounts of debt to finance a deal, and the Hershey Charitable Trust would be loath to relinquish control in any new company.
Cadbury chews over dual-listing idea
A solution to facilitate a Cadbury-Hershey merger and repel Kraft’s $16.6bn hostile bid for the UK confectioner has been outlined in a letter to Cadbury CEO Todd Stitzer from the special situations team at brokerage GFI,
Hershey CDS update: Thar she blows (wider)
Hershey’s market capitalisation: $8.6bn
The amount of debt HSY needs to buy Cadbury: $9bn
Jump in HSY 5-year CDS price move after HSY confirmed its interest: 33 per cent
A pretty chart of Hershey’s equity versus 5-year CDS,
CDS report: US data dent sentiment
Gavan Nolan of Markit wrote this CDS report
European credit indices tightened slightly today, a creditable performance given the volatility in equity markets. The Markit iTraxx Europe index was about 1bp tighter at 82bp,
Hershey, Ferrero plot Cadbury bid
US chocolate giant Hershey is considering launching a bid for Cadbury – possibly in partnership with Italy’s Ferrero – that could help the UK confectioner fend off a hostile takeover by Kraft Foods,
Hedge funds back Kraft
The growing share of Cadbury held by hedge funds betting that Kraft will raise its $16.2bn (£9.8bn) offer for the UK confectioner is increasing the likelihood that Kraft’s hostile bid will succeed, say brokers.
Hedge funds bite into Cadbury
Paulson & Co, the New York hedge fund run by John Paulson, has disclosed a 2.08% stake in Cadbury following Kraft’s £9.8bn ($16.4bn) hostile bid this week, signalling growing hedge fund interest in the UK confectionery group following Kraft’s hostile bid.