US/UK. Kraft Foods today announced the terms of an offer for UK rival Cadbury.
The US company said it will offer to acquire the entire share capital of Cadbury for 300 pence in cash and 0.2589 new Kraft shares for each Cadbury share. These are the same terms as it proposed in September when its interest was first announced.
However, Kraft’s share price has declined since that point, meaning that the bid has dropped in real value terms from its original £10.2 billion to £9.8 billion (US$16.4 billion).
Cadbury had rejected the initial proposal, saying it “fundamentally undervalued” the company.
Kraft said today that its offer represents a substantial premium to the unaffected share price of Cadbury, describing it as “an attractive multiple” of Cadbury’s underlying EBITDA.
It claimed Cadbury shareholders will share in the benefits of a combination, including synergies, through the share element of the consideration
No other potential bidder has publicly declared its interest in acquiring Cadbury, Kraft noted.
Kraft Foods Chairman and CEO Irene Rosenfeld said: “We remain convinced of the strategic merits for both companies of combining Kraft Foods and Cadbury. We believe that our proposal offers the best immediate and long-term value for Cadbury’s shareholders and for the company itself compared with any other option currently available, including Cadbury remaining independent.”
[comments]
