DealZone

Irene prepares to tough it out

November 2, 2009

It looks like Kraft CEO Irene Rosenfeld is getting ready to play hardball with her reluctant target, British chocolate maker Cadbury.

Cadbury investor Mario Gabelli will be disappointed in the short term – he wanted a small kissĀ fromĀ Irene after all - but a formal offer from the North American food group sets in motion an 88-day process under UK takeover rules.

That should give Kraft plenty of time to sweeten its offer to something starting with an eight – the 800p per share bar regarded by many as the minimum price needed to tempt Cadbury to the negotiating table.

Kraft is expected to post earnings of 48 cents a share for the third-quarter, up from 44 cents a year earlier, according to analysts’ estimates, and good results are expected to strengthen its hand in the ensuing battle with Cadbury.

It’s time for those high-profile bankers working for Cadbury to start sharpening the defence. It’s backed by the trio that ran last year’s demerger of its U.S. softs drinks business, as I wrote earlier here.

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