Kraft Attempts Takeover Bid - Wants Merger With Cadbury

by amyellensoden | November 9, 2009 at 01:59 pm

221 views | 10 Recommendations | add comment

Kraft made a $16,3 billion bid for Cadbury today which was rejected on the basis of the offer not being high enough. Kraft will not be adjusting their pitch on the basis that their offer was not only fair but would benefit Cadbury's earnings in the long run as well as their own. Cadbury has already rejected an offer made by Kraft back in September and rebuked the US food company once again today.

Cadbury will resist the merger until Kraft increases its offer to at least £8 per Cadbury share. Cadbury's concerns are namely the fear of becoming absorbed by a business conglomerate that will envelope its identity and success. Kraft, on the other hand, believes that a merger would allow both companies to expand their markets into other countries.

Kraft, which makes of Ritz crackers and Oreo cookies, offered £3, or $4.90, in cash and 0.2589 new Kraft shares for every Cadbury share. The offer values each Cadbury share at £7.17, a 26 percent premium to the price before Kraft made its original proposal.

Today's bid made by Kraft was a result of Britain's Takeover Panel deadline for a pitch to be made. Kraft had the choice to either make an offer or be banned from making any future offers within the following six months of the deadline.

If a deal can eventually be reached between Kraft and Cadbury, it will be the biggest merger to happen this year.

3 See all footage | View Slideshow

Share: email story | add to any | | facebook | stumbleupon