The U.S.’s biggest food group Kraft Foods has made a $16.7 billion bid for the U.K.’s Cadbury but the world’s second-largest confectionery group has rejected the approach. Kraft said in a statement that it had offered 300 pence in cash and 0.2589 new Kraft shares for each Cadbury share, reported Reuters. Based on Kraft’s own closing share price of $28.10 on September 4 and a sterling exchange rate of $1.6346, that values each Cadbury share at 745 pence and the company as a whole at 10.2 billion pounds ($16.66 billion). The offer is a 31 percent premium to Cadbury’s closing share price of 568 pence on September 4. Cadbury’s board rejected the proposal, Kraft said adding that it was “committed to working toward a recommended transaction and to maintaining a constructive dialogue.” Kraft said it had published details of its approach in order to “encourage and further that process.” It added the combined company would have revenues of about $50 billion and create “a global powerhouse in snacks, confectionery and quick meals, with an exceptional portfolio of leading brands around the world.” It also predicted a takeover would result in “meaningful revenue synergies over time” and said there was an opportunity to save at least $625 million a year in pre-tax costs.
Kraft Covets Cadbury But $16.7B Bid Spurned
Kraft said in a statement that it had offered 300 pence in cash and 0.2589 new Kraft shares for each Cadbury share.
September 7, 2009