Kraft bid wins over 74% of Cadbury shareholders
The US company announced yesterday that all the conditions standing in the way of its recommended final offer had been either satisfied or waived. The final offer remains open and Kraft will give 14 days notice before closing it. Nonetheless, any Cadbury shareholder that wishes to accept but has not yet done so is encouraged to act without delay.
As at 13h00 GMT yesterday, acceptances had been received in respect of 987,684,041 Cadbury Shares – around 71.73 per cent of Cadbury’s share capital. Only 50 per cent were required to validate the deal. Kraft’s first bid, to the tune of 745p, was acceptable to only 1.5 per cent of shareholders.
If it receives the 90 per cent of shares, it will be able to acquire all others on a compulsory basis.
The process of delisting Cadbury shares from the London Stock Exchange – which will reduce the liquidity and marketability of shares – will start as soon as possible with the eventual aim of re-registering Cadbury as a private company.
Irene Rosenfeld, Chairman and CEO of Kraft Foods said: "The combination of Kraft Foods and Cadbury creates a global powerhouse in snacks, confectionery and quick meals. Together we have impressive global reach and an unrivalled portfolio of iconic brands, with tremendous growth potential.”
Rosenfeld is expecting the Cadbury arm to deliver “outstanding” returns to shareholders and expects a “phenomenal” future for the combined company. Not everyone is so sure. Warren Buffett, multibillionaire chairman and CEO of Berkshire Hathaway and, with 9.4 per cent, Kraft’s biggest shareholder, has slammed the raised bid. He said he does not have the power to stop it, but would vote ‘no’ if he had the chance.
Meanwhile, concern has been expressed over the future of the 4,500 Cadbury jobs in the UK. Given that Kraft expects to generate US$675 million in cost savings from the deal every year, analysts have predicted that some jobs will have to go.
As Cadbury workers travelled to London to press the government to step in and secure their jobs, UK Business Secretary Peter Mandelson met with Rosenfeld.
Following the meeting yesterday, Mandelson said: "I did not receive any specific commitment or reassurance that Cadbury's global businesses would continue to be managed or operated from the UK.
"Ms Rosenfeld confirmed that manufacturing would continue to be located here and she said that she expects that the UK will be a net beneficiary in manufacturing jobs."
For her part, Rosenfeld said: "I made clear to him our belief that the combination of Kraft Foods and Cadbury will be better for UK manufacturing than Cadbury's standalone prospects."