UK: Cadbury rejects claims of search for "white knight"
Shares in Cadbury have fallen this week after Nestle said it would not bid for the Dairy Milk maker and after Kraft did not increase its offer for the business - but merely changed the "mix" of its bid with the promise of more cash for the UK firm's investors.
Cadbury's stock has also been under pressure since Kraft's largest investor, the Warren Buffett-led Berkshire Hathaway said it would oppose the US food giant's proposal to issue up to 370m new shares in the company to fund its bid for the confectioner.
Reports emerged overnight that members of the Cadbury board had held talks with Hershey to maintain that they would support a bid by the US chocolate giant.
Sources told the Wall Street Journal that the Cadbury board members had also given some indication on the kind of price that would attract support for any bid from Hershey.
However, Cadbury, told just-food today that it is "not looking for a white knight" and that the company remains "focused on demonstrating the value and potential of Cadbury as the world's greatest confectioner".
"As we have consistently said, we are focused on delivering value to our shareholders and unless and until we have a credible offer that adequately reflects the strength of this business, there is nothing to comment upon," a spokesperson said.
Kraft Foods yesterday announced that only 1.52% of Cadbury's shareholders had so far accepted its hostile takeover bid for the UK confectioner.
Such a small fraction of investors accepting Kraft's approach has been viewed as a sign that the US food giant will have to increase its offer in order to win control of Cadbury.
However, Kraft has instead pinned its hopes for success on the move to raise the cash component of its offer, which is worth around GBP10.3bn (US$16.5bn).
Kraft said it will use the funds from the US$3.7bn sale of its North American frozen pizza business to Nestle to increase the cash portion of its offer from 300 pence per share to an expected 360p per share.
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