Kraft’s waiting game continues

December 9, 2009

cadburyThere’s a new deadline in Kraft’s hostile bid for European chocolate maker Cadbury: January 6. That’s the date European regulators have extended their review of the bid until, meaning the hostile battle that started in September is all but sure to spill into the new year.

Kraft has offered concessions to ease concerns that the deal might be anticompetitive, but doesn’t plan to make major divestitures.

Still, there is some question whether approval by the authorities will make much of a difference, unless Kraft raises its bid.

Cadbury shares are still trading above Kraft’s offer and a source close to Cadbury has called the bid “derisory.” The U.S. company has also received warnings from Britain’s government about trying to pull off the deal on the cheap.

Cadbury has said it will respond to Kraft’s offer on Monday, Dec. 14. Until then, investors will have to take their cue from Kraft and wait.

One comment so far | RSS Comments RSS

I have yet to come across any constituency be it consumers, customers, employees, shareholders, investors or politicians who really want this deal to materialize. No doubt all these stakeholders are aware of Kraft’s dismal track record in previous acquisitions and they want to avoid the fate previous unsuccessful acquisitions met. On the other hand Nestle has a phenomenal track record in successfully integrating acquisitions that they are all hoping that Nestle will eventually come to Cadbury’s rescue.

It is interesting that this unwelcome overture is not completely unexpected but Cadbury’s management had no provisions to deter such a move or protect the interests of shareholders, employees and investors. Would be interesting to see how this hostile takeovers eventually pans out because I don’t recall any recent instance where Kraft and Nestle have gone after the same prize. They have pretty much left each other to their own designs.

Posted by Kites | Report as abusive

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