Kraft Foods loses patience with Cadbury
After weeks of discussions with investors and advisers it appears that Irene Rosenfeld, the chief executive of US food giant Kraft Foods, will this week put the finishing touches to a hostile offer for Cadbury. It is believed that a bid of around £10.5 billion may be in the offing which would equate to an offer price at or around eight pounds a share. The company is under pressure to "put up or shut up" by 9 November, a deadline set by the takeover panel in conjunction with a possible offer for Cadbury.
While an offer of around eight pounds a share would not necessarily be a knockout bid, without a third party entering the fray, to push up the price, there is no reason for Kraft Foods to offer a "knockout bid". As a consequence we could see a game of cat and mouse over the next few weeks between Cadbury, Kraft Foods and Cadbury investors. With Cadbury shares priced at £7.70 it would appear that the market is growing tired of the situation and does not, at the moment, believe a third party will run to the rescue of Cadbury.
The situation will become clearer over the next 10 days or so at which point Cadbury will have to make a decision either way, whether it goes into talks with Kraft Foods about an agreed offer or tries to fight its way out of the current situation and remain independent.
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