Kraft's Cadbury offer, Take 2
This time, it took a largely unchanged $16.3 billion bid, earlier rejected by the firm, directly to shareholders.
PORTLAND, Ore. - Kraft Foods Inc. took its $16.3 billion takeover offer for Cadbury P.L.C. straight to shareholders of the British candy company yesterday.
The deal is nearly unchanged from an earlier offer that was rejected by Cadbury management. But by putting it directly in shareholder hands, Kraft starts the clock on a series of regulatory deadlines to get the majority support it needs - and it may flush out rival bids.
Kraft in September proposed a takeover of Cadbury and formally issued the bid in November. Cadbury immediately turned down the offer, saying it undervalued the company.
Cadbury, the maker of Dairy Milk chocolate and Dentyne gum, declined to comment on the offer yesterday but has been clear about its uninterest at this price. Under British securities regulations, Cadbury now has two weeks to give a formal response to the offer facing shareholders.
Keeping yesterday's appeal to shareholders the same as the original offer gives Kraft, the maker of Oreo cookies, Nabisco crackers, and its namesake cheese, some wiggle room to later increase its bid should a rival suitor emerge.
The Hershey Co. and Italy's Ferrero International S.A. have said they are considering an offer. Also, Bloomberg News reported yesterday that Hershey and Nestle S.A. have been in contact on a possible bid for Cadbury. Hershey would not comment yesterday on the possibility of a competing offer. Nestle, the Swiss food company, also had no comment.
Cadbury is an attractive acquisition for any of the companies. It is one of the world's largest confectionary companies and has strong international reach, with a key presence in emerging markets.