TAKING THE BISCUIT
CADBURY last night dismissed a hostile £9.8bn takeover offer from the world’s second largest food company Kraft, accusing it of “irritating” its shareholders by making a low-ball tactical bid.
Kraft’s hostile offer, which landed just hours before a deadline set by the City’s Takeover Panel, was made on the same terms as first mooted back in September when it made an indicative offer.
Since then, Kraft’s share price has fallen, as has the US dollar, taking the value of its cash and shares bid for Cadbury down from 745p a share to 717p a share. Kraft is offering 300p in cash and 0.2589 of its shares for each Cadbury share.
Speaking to City PM last night, Cadbury chairman Roger Carr said: “They had trailed the fact that they would play a long game at a low ball level but even so we are surprised to see a reduction in the value of the bid.”
“Shareholders are finding this pretty irritating,” added Carr, who claims support from a large group of the company’s institutional shareholders as well as many of the hedge fund holders. “This does not move the position forward at all.”
Carr’s position received backing in parts of the City. Panmure Gordon analyst Graham Jones said: “People aren’t impressed with Kraft’s strategy or hardball tactics. It’s a waste of time and people are getting tired of it.”
But Kraft’s chairman and chief executive Irene Rosenfeld remains adamant about not overpaying.
She said: “We believe that our proposal offers the best immediate and long-term value for Cadbury’s shareholders and for the company itself compared with any other option currently available.”
So far Cadbury has not attracted a rival bid, but as Carr pointed out: “It would be unusual for anybody to emerge before Kraft put its price on the table… We would neither encourage nor discourage anybody that wants to show an interest.”
Carr says he has tried hard to ensure that the Kraft bid has not distracted Cadbury management unduly.
“We have made sure that those who are driving the business forward continue to engage with that and are not moved by the external noise.”