The plot thickens at Cadbury
It has been revealed that billionaire activist investor Nelson Peltz has reduced his stake in Cadbury at a time when most "activists" are looking to increase their exposure to the company. The sale of 3.5 million shares on Tuesday between 805p and 812.5p would appear to indicate that some investors believe the share price has pushed too far in the short term when considering the bid on the table and potential bids in the future.
The company is currently under threat from US outfit Kraft Foods which has launched a £10.2 billion offer for the group although there are rumours that other third parties are now stepping forward and will be announcing their own intentions in the short term. However, the only real offer on the table is that from Kraft Foods which is substantially less than the current Cadbury share price, indicating that investors on the whole believe that a higher offer will emerge in due course.
While the sale by Nelson Peltz has not gone unnoticed, it is worth remembering that he still holds 2.68% of the company and there is nothing to stop him from increasing his stake if the share price continues to head south. He is an activist investor after all and in their particular arena of investment, a profit is not a profit until you have sold your shares!
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