Cadbury receives £10 billion takeover offer
The UK stock market came alive this morning with news that Kraft Foods Inc of the US has launched a £10.2 billion takeover offer for UK giant Cadbury. While the initial offer, a mixture of cash and Kraft Foods shares, has been rebuffed there is a feeling within the city that further offers could materialise from other third parties and indeed Kraft Foods could come back with a higher offer. So is Cadbury in play?
Cadbury has been at the centre of many rumours in the past with regards to potential US takeover bids although this is the first such offer to actually materialise. There is no doubt that the fit between Cadbury and Kraft Foods is near-perfect and is unlikely to be repeated with any other third party. As a consequence, it seems as though Cadbury may be more beneficial to Kraft Foods than the likes of Nestlé and other potential bidders who may enter the fray.
Cadbury shares have increased by over 30% this morning and are above the Kraft Foods offer price which would indicate a higher bid may be required to get the backing of investors and the Cadbury's board. This is a takeover approach which has a lot further to run!
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