Investors Tell the Predator to Raise Its Bid and the Prey to Raise Its Game
Tuesday, November 17, 2009 3:05Cadbury’s UK shareholders piled the pressure on the confectionery group to deliver a comprehensive defense against Kraft’s hostile bid as they said that the US predator must pay up to stand a chance of success.
As well as urging Kraft to add at least £1 a share in cash to its bid, institutional investors said that Cadbury’s management needed to pull out the stops to justify staying independent.
British shareholders in Cadbury described Kraft’s formal cash-and-shares offer as an opening gambit.
Investors said that a deal at 820p to 830p would probably meet with approval in Britain. Investors also expect Kraft to come under intense pressure from its own shareholders not to overpay. UK institutional investors said the share component of Kraft’s offer made it unattractive. Many funds are prohibited from owning hares in overseas companies and would have to sell Kraft stock immediately, probably at a loss.
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