David Prosser: Cadbury to milk Kraft
Thursday 22 October 2009
Outlook With less than three weeks to go before Kraft must make a formal bid for Cadbury, the chocolatier is doing its best to make things sticky for its American suitor. Yesterday's blockbuster trading update gives further credence to Cadbury's insistence that it has a happy and prosperous future as an independent entity. Note also that the business continues to outperform Kraft itself, which should give shareholders pause for thought when the would-be acquirer offers its own paper as part of the deal.
And yet in refusing to play the sentimental card – opting not to attempt to wrap Cadbury in the Union Jack – chief executive Todd Stitzer and chairman Roger Carr have conceded that the market will ultimately decide the fate of this deal. Or to put it another way, if Kraft comes up with a price that is high enough, it will get its prey.
That price may have to be higher following yesterday's update – think at least 900p compared to Kraft's mooted 745p – but we long ago made the decision in this country that if a foreign bidder is prepared to pay for our assets, we are prepared to sell.
Kraft may struggle to raise the cash needed, but assuming it does, its sweet tooth will be satisfied.
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