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CADBURY - where are the private equity boys?
Posted 09/09/09
In an interview with Dow Jones, Kraft’s VP for Food Strategy, Michael Osanloo, spoke clearly about how his company views the rejected Kraft bid for Cadbury.
Osanloo stated that:
a) times are a different, and the key thing to focus on is the premium to the prevailing share price that Kraft has offered in its cash + equity deal of 745p. He makes reference to the premium of the Mars/Wrigley’s deal of 28%, which is less than the 31% premium in the Kraft/ Cadbury offer to the prior day price (not the longer term average) and times have changed,
b) by implication Cadbury’s Vision in Action (VIA) programme was fully priced into the British group’s share value, and that the synergies that shareholders can bebefit from of $625m (over and above the VIA savings) are deemed realistic but only realisable through Kraft!
and
c) Cadbury’s is worth what someone’s prepared to pay for it - the premium to the 90 day average price was a whopping 34%!
As has been pointed out, the reality post Lehman’s is that capital is more expensive and scarce so a reality check is worth pondering. No doubt Kraft has not put forward its final offer forward yet, but it is suggesting that it has a final offer that may be someway short of the more fanciful expectations being talked around the market (in excess of 900p).
Many were previously of the view that Cadbury stock was already very fully valued prior to the Kraft offer!
There might not be much more to come from Kraft, so its over to others!
With that lovely cash flow, where are the private equity boys?
This entry was posted 2 years, 5 months ago and was filed under Cadbury.
