Kraft gets some support for takeover
By Robert Barr |
January 7, 2010, Thursday
|
Print Edition
Print Edition
KRAFT Foods Inc announced yesterday that holders of 1.5 percent of shares in chocolate and gum maker Cadbury Plc have so far accepted its hostile takeover offer.
Kraft added that it stands to gain support as the offer price moves closer to Cadbury's market value.
The gap narrowed on Tuesday as Swiss food company Nestle said it would not make an offer for Cadbury, Kraft offered more cash in an alternative - but no higher - offer, and billionaire Warren Buffett, Kraft's biggest shareholder, warned against offering any more stock to sweeten the offer.
Kraft financed its enhanced cash offer by selling its United States pizza business to Nestle.
London's Financial Times called Buffett's intervention "a blatant attempt to talk up the food group's share price" - and if so, it worked. Kraft shares closed on Tuesday at US$28.77, up 4.9 percent, while Cadbury was down 3.2 percent at 779 pence (US$12.45).
Kraft's cash and shares offer values Cadbury, maker of Milk Tray chocolates, at 758 pence per share, based on Tuesday's prices.
Cadbury shareholders have until February 2 to decide whether to accept the 10.3 billion pound offer.
Kraft added that it stands to gain support as the offer price moves closer to Cadbury's market value.
The gap narrowed on Tuesday as Swiss food company Nestle said it would not make an offer for Cadbury, Kraft offered more cash in an alternative - but no higher - offer, and billionaire Warren Buffett, Kraft's biggest shareholder, warned against offering any more stock to sweeten the offer.
Kraft financed its enhanced cash offer by selling its United States pizza business to Nestle.
London's Financial Times called Buffett's intervention "a blatant attempt to talk up the food group's share price" - and if so, it worked. Kraft shares closed on Tuesday at US$28.77, up 4.9 percent, while Cadbury was down 3.2 percent at 779 pence (US$12.45).
Kraft's cash and shares offer values Cadbury, maker of Milk Tray chocolates, at 758 pence per share, based on Tuesday's prices.
Cadbury shareholders have until February 2 to decide whether to accept the 10.3 billion pound offer.
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