City File: Sweet taste

PRICEWISE, Cadbury Schweppes has still not recovered from not being taken over. As John Parker of BZW says, 'on the Rowntree's exit multiple, Cadbury is worth 700p' - well above its present 490p.

Yet since the great takeover scare/hope four years ago, Cadbury has done nothing wrong. The market worried over the pounds 900m buying spree of the late 1980s, but now the acquisitions have been bedded down.

Cadbury is better placed than most of its rivals to exploit trading unification in Europe, and in the US the fragmented Cadbury brand portfolio increasingly looks like a strength. Even in difficult times, rock-solid brands prove the best of defensive assets, with Cadbury able to edge up prices.

Even at 18 times likely 1992 earnings, the shares don't look expensive compared with the second-rate stocks floating to the top of a frothy market.