Cadbury offers $1.7bn for Pepper
Friday 27 January 1995
To help fund it, Cadbury is raising £395m from a one-for-seven rights issue at 340p a share. The market was unfazed by the group's second cash call in under 18 months, and the shares added1.5p to 420p.
Cadbury directors cited increased volumes, the potential for sales of Dr Pepper outside the US, and cost savings through cutting duplicated overheads. The deal will increase the British company's US market share from 4.9 per cent to 16.3 per cent.
David Wellings, Cadbury's chief executive, said it was vital to crack the American market, which accounts for one in three of all soft drinks consumed worldwide, if the company was to realise its aim of being number one in non-cola soft drinks.
Cadbury, which already has 23 per cent of its target, refused to detail the scale of job cuts at Dr Pepper, America's third-biggest soft drinks outfit after Coca-Cola and Pepsi. They are likely to be substantial.
The tender offer is worth $33 a share. The rights issue is the so-called "trombone" variety, with £115m raised unconditionally, and the second instalment of £280m conditional on a successful acquisition.
Cadbury is also increasing its cash resources towards the deal by £111m via an underwritten enhanced scrip dividend alternative. It will pay a second interim dividend instead of a final dividend, which will give shareholders 16.5p if they take shares and11p if they take cash. The exercise will save £23m in advance corporation tax.
Yesterday's transaction represented a strategic milestone, Dominic Cadbury, chairman of Cadbury Schweppes, said.
- 3 The enemy within: People who hear voices in their heads are being encouraged to talk back
- 4 Phil Neville backtracks on Tomas Rosicky 'I'd smash him' comments from Match of the Day 2
- 5 British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Paris attacks: Do not call Charlie Hebdo killers 'terrorists', BBC says
UK weather: Snow to fall in the coming week with sub-zero temperatures to last until early February
Asteroid narrowly scrapes past Earth: how to watch the closest space rock for decades as it flies by
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Prince Philip set to be knighted by Australia: Celebrate by reading his greatest gaffes
Nigel Farage: NHS might have to be replaced by private health insurance
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
Greece elections: Syriza and EU on collision course after election win for left-wing party
British Muslim school children suffering a backlash of abuse following Paris attacks
George Galloway condemns 'racist, Islamophobic, hypocritical rag' Charlie Hebdo at freedom of speech rally
iJobs Money & Business
£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...
£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...
£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...
Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...