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Takeover Panel sets Cadbury clock ticking for Kraft

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KRAFT-CADBURY/So Cadbury has succeeded in convincing the UK’s Takeover Panel — the City of London body which polices M&A — to slap a “put up or shut up” order on Kraft.

Kraft now has until Nov. 9 to decide whether to make a formal offer for the British confectionery group. If it decides to walk away, it is not allowed back for six months.

Cadbury shares are still trading above the price of Kraft’s informal stock and cash offer. At just over 8 pounds per share, the current price is some 10 percent above the indicative offer, which is now worth just 7.20 pounds. But shareholders in Cadbury — which is a household favourite in the UK — aren’t being that ambitious in their expectations for an improved offer. The shares are trading at nowhere near the multiples which were initially bandied about after Kraft’s approach became public.

And despite noises about Kraft finding it difficult to raise the money it needs for the 11 billion pound bid – of which some 4.1 billion pounds would be in cash — bankers seem to think there won’t be any problem getting lenders to make the necessary loans.

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