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Does the Cadbury's offer confirm that the recession is over?

Today's £10 billion offer for Cadbury's by Kraft Foods Inc took the markets by surprise with many now under the impression this may well mark the end of the recession. This is by far and away the largest takeover offer for many months and the fact that Kraft Foods believes it can raise the funds required to take over Cadbury is also a very positive sign for investors.



However, if you compare the stock market to the housing market, we have seen many "bottom fishers" looking to acquire properties and businesses at the bottom of their cycle and take advantage of low market valuations. Whether this is just an opportunistic bid by Kraft Foods or it does in fact mark the end of the recession is open to debate but one thing is for sure, there is likely to be more interest in Cadbury's now that Kraft Foods has shown its hand.



The fact that Kraft Foods feels confident about raising the funds required to take over Cadbury is also a very positive sign because ultimately it will need the backing of Kraft Foods investors and the company's bankers. However, it may be a little on the hopeful side to expect a flurry of similar bids for other companies, at least for the time being.

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