Will Cadbury get taken over?

Cadbury bids

For months now there has been speculation over who will buy Cadbury, or if Cadbury will ever find an offer that suits them and be willing to sell. As I passed by the Cadbury factory just outside Bristol on the train this morning, I wondered if this factory will continue to be a sight that I see every morning.

There have been various rumours of different companies intent on buying Cadbury, but many have failed to surface of yet. The deal that has drawn the most attention, has been the Kraft offer.

Hotly tipped to make an offer has been Nestlé. This fire was fuelled when it was announced that the food giant had agreed to sell its majority stake - 52 percent, in the healthcare company Novartis for GBP£17 billion.

Despite speculation, Nestlé has issued a statement to stating that it "does not intend to make, or participate in, a formal offer for Cadbury."

Kraft increase offer

As Nestlé state they have no intention of making an offer, Kraft Foods has added new cash to its GBP£10.3 billion bid for Cadbury.

Kraft has increased its cash offer as its sold its North American frozen pizza business to Nestlé for US$3.7 billion, the British paper The Times states.

As well as increasing the cash offer, Kraft have extended the deadline for acceptances of its bid to 2 February.

Kraft, which said the pizza sale came after "several months of discussions" with Nestle, said that it was providing the extra cash "because of the desire expressed by some Cadbury Securityholders to have a greater proportion of the offer in cash and because Kraft Foods shareholders have expressed a desire for Kraft Foods to be more sparing in its use of undervalued Kraft Foods shares as currency for the offer."

The food group added, "Kraft Foods continues to believe that its share price is depressed as a consequence of a number of short-term factors which it believes will dissipate once the uncertainty surrounding its offer for Cadbury is resolved."

New offer

Cadbury investors who accept the offer will be able to choose to receive an extra 60p a share in cash or 240p a Cadbury ADS instead of some of the new Kraft shares they would otherwise have been offered.

Kraft said that it would publish the full details of the cash alternative by January 19, the last date at which it can amend its offer.

Cadbury quickly dismissed the revised offer. A spokesman for Cadbury said: "Despite this tinkering, the Kraft offer remains unchanged and derisory and less than half the consideration is in cash."

Nestlé declaring that is has no interest in Cadbury leaves Kraft as the only current bidder for the company. Although the UK confectioner says it has been in talks with US company Hershey about a possible deal.

Related News:

Cadbury vs Kraft |Cadbury defends decision |Hershey and Ferrero join forces for Cadbury

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