Blog: Dean BestWill Cupid's arrow strike for Kraft and Cadbury?

Dean Best | 11 November 2009

There certainly is no love lost between Kraft Foods and Cadbury - of that there is little secret - and an end to the takeover saga may not come until a week before Valentine's Day.

After Cadbury's immediate rejection of Kraft's hostile takeover approach on Monday (9 November), industry watchers flicked through their calendars to pencil in the next likely sign-posts in the US food giant's pursuit of the Dairy Milk maker.

From Monday, Kraft has 28 days to publish its offer documents to Cadbury shareholders - and the UK firm has 14 days after that to publish a formal, written response to the bid. That would take us until 21 December.

The Christmas decorations would have come down before the next deadline for Cadbury. According to analysts at Jefferies International, Cadbury has until 15 January to publish any "material" new information - be it M&A (or more likely) a trading update.

A week later will come a critical day for Kraft: 22 January is the last date by which the Toblerone maker can revise its offer.

Kraft chairman and CEO Irene Rosenfeld then has until 5 February to get at a majority of Cadbury shareholders to accept her offer.

"We now believe this transaction will go to the wire," Jefferies equity analyst Simon Marshall-Lockyer writes.

"We suspect that Kraft made this low-end offer as a minimum official bid so as to remain in the running while buying time to achieve possible asset sales," Marshall-Lockyer adds - citing speculation that the group could sell its coffee units to Sara Lee.

Speculation of all kind continues to abound. As we reported yesterday, analysts agree that Kraft's offer is too low - but they are split on how far it should go in raising its offer.

There is also disagreement over whether a rival bid for Cadbury will emerge.

What is likely is that any end to this saga will come long after we have gobbled down our Christmas candy - and just before we send our love ones a box of Valentine's chocs.


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