Cadbury putting pressure on Kraft
On the morning of 7th September 2009 when I was browsing through business section of newspaper, I read the surprise news of Kraft Foods Inc. plans to acquire Cadbury Plc. That day I noticed, Cadbury stocks rose by about 42%. Today, Cadbury Plc announced that the sales in the July-September quarter rose 7%. The targets for the next quarter has been increased. “We have the momentum and the growth,” Mr. Stitzer, CEO, Cadbury Plc told in a telephone briefing after the trading update. This will force Kraft Foods Inc. to increase its bid further. “This upgrade increases the pressure on Kraft to up its offer before the “put up or shut up” period runs out on Nov 9,” analyst Jeremy Batstone-Carr at brokers Charles Stanley told Reuters.
The inverstors, however, are unmoved with the decision of increasing the targets and sales forecasts as the stock price didn’t rose much. The investors were already knowing that this is best Cadbury can think of. “We always thought this was the minimum Cadbury would have to do to persuade Kraft to raise their bid, so there’s no real surprise here,” said one of the trader.
“This puts the ball firmly back in Kraft’s court, and is exactly what Cadbury shareholders would have hope for,” Panmure Gordon analyst Graham Jones, told Reuters, adding that it reduces the chance of Cadbury being acquired “on the cheap.”
Now, we have to wait and watch, what Kraft Foods Inc. come up with.