Kraft Foods is expected to announce tonight (NZ time) an offer that is acceptable to the board of Cadbury, opening the door to the creation of a giant food and confectionery company.Overseas reports say Kraft is closing in on a deal that will be worth as
Kraft Foods is expected to announce tonight (NZ time) an offer that is acceptable to the board of Cadbury, opening the door to the creation of a giant food and confectionery company.
Overseas reports say Kraft is closing in on a deal that will be worth as much as $US19 billion.
A successful deal, made as Kraft’s deadline to sweeten its offer expires, will end more than four months of public verbal sparring that followed the initial hostile takeover approach back in September.
It would have big implications for the New Zealand market, where Kraft is prominent in food products such as Vegemite and Philadelphia spreads, while Cadbury has the biggest share of the chocolate and sweets market.
The two companies were reported to be in talks late Monday night that could lead to a friendly deal announcement on Tuesday morning.
UK takeover rules imposed the deadline on Kraft to raise its bid – described at the start as “derisory” by Cadbury – that combines cash and shares.
The original bid was worth about $US16.5 billion but since then Cadbury shares have risen on its improved prospects, while Kraft’s outlook has also improved. It has raised more cash, too, by selling its frozen pizza business in the US to Nestlé, which ruled out bidding for Cadbury.
Observers say a deal at 850p for each Cadbury share would still represent a roughly 5% premium to the current share price of Cadbury, which closed 1.8% higher at 807.5p in London.
Apart from Nestlé, Italian chocolate company Ferrero has also flagged making a bid while US-based Hershey, which has reportedly raised finance for an offer, has yet to reveal its hand,
