Is bid fever about to sweep European stock markets?
As the dust starts to settle on the first of what could be many bids for Cadbury's, the £10 billion offer from Kraft Foods has certainly caught the attention of many investors. Today we saw the FTSE 100 increased by 1.68%, the FTSE 250 by 2.18%, the FTSE All Share increased by 1.75% and the techMark 100 also joined the party with a rise of 1.24%. Is this a turning point in European and worldwide investment markets?
There is no doubt that the offer for Cadbury's caught many investors by surprise, even if there have been rumours for many years. The fact that the Kraft Foods is willing to pay £10 billion for the company is certainly a major move and a positive one in the eyes of money markets and investment markets around the world. Even though at this stage it looks as though the offer will have to be increased to guarantee a positive recommendation from the Cadbury's board it is certainly a mark of the company's intention to move onto the acquisition trail.
Whether this renewed interest in the stock market will be short lived or could turn out to be the turning point which many have been waiting for remains to be seen. However, the more bids that we see in the short to medium term the more interested investors will become, which should increase liquidity across stock markets and money markets.
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