Kraft makes bid for Cadbury

Wed 20 Jan 2010

He says the US giant may raise its offer to between 840 and 850 pence per share, with 850p valuing the chocolate-maker at £11.7bn.

Kraft launched its hostile takeover bid for Cadbury in December, having its previous offer of 761p rejected.

The two firms may jointly announce the successful bid later.

Shares in Cadbury ended Monday trading up 14 pence or 1.8% to 807.50p.

No-one from either Cadbury or Kraft has been available for comment.

Losing independence

Our business editor said it now seems "highly likely" that Kraft and Cadbury will agree a deal that will probably be announced at 0700 GMT.

An agreement between the two companies would end the intense animosity between the firms that first manifested itself when Kraft announced its desire to own Cadbury last autumn.

It would also end any doubt at all that Cadbury will lose its independence.

There would still be a theoretical possibility that the US confectioner Hershey would come in with a higher offer.

But if Cadbury's board recommends Kraft's bid, it means that the company will be taken over.

Jobs fears

Negotiations between Cadbury's bankers and Kraft's bankers are taking place overnight.

Unions and analysts have both warned that there will likely be job losses among Cadbury's 45,000 workforce following a takeover.

Kraft has a Tuesday deadline to make its second and final formal bid for Cadbury, or else have to walk away from the deal for a year.

The US giant had previously faced pressure from its leading shareholder - US billionaire investor Warren Buffett - not to overpay for Cadbury.

However, Kraft raised extra funds earlier this month when it sold its North American pizza business to Swiss group Nestle for $3.7bn (£2.3bn).

Continue