Paulson doubles stake in Cadbury after Kraft bid
Hedge fund star John Paulson, who bet against the US housing market just before its collapse, has doubled his stake in Cadbury.
The New York-based hedge fund now owns 28.5m shares, or 2.08 per cent, of Cadbury after spending some £112m on 14.8m shares at 759.59p, according to British regulatory filings.
John Paulson ranks as one of the $1.5 trillion hedge fund industry’s best traders and cemented his reputation by defying conventional wisdom with bets US housing prices could fall on a national scale. With that bet Paulson became the industry’s highest-paid manager by earning more than $3bn in 2007.
The hedge fund’s move in Cadbury was announced hot on the heels of news that USfood giant Kraft Foods would not sweeten its $16.2bn (£9.67bn) offer for the company.
Instead Kraft plans to take its offer to Cadbury shareholders, setting the stage for a bitter takeover battle that could last months.
Bernstein analysts said that Kraft would have to raise its price to around 850p to stand a chance of the bid being accepted.
Bernstein’s Andrew Wood said: “The acquisition of Cadbury would be a ‘once in a lifetime opportunity’ for Kraft to significantly strengthen its portfolio by acquiring Cadbury’s strong positions in attractive categories and markets.”
Cadbury shares yesterday closed up 0.26 per cent to 763p.