Cadbury today (25 September) tried to clear up the confusion surrounding reports that CEO Todd Stitzer had claimed Kraft Foods’ proposed offer for the business made “strategic sense”.
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The UK confectioner this afternoon issued a short statement attempting to “clarify press commentary” that had “misconstrued” remarks Stitzer made to analysts earlier this week.
Stitzer addressed analysts at a closed Bank of America/Merrill Lynch conference on Tuesday. Following the meeting, Merrill Lynch sales specialist Simon Archer wrote in a note that Stizter had said Kraft’s proposed offer made “some strategic sense”.
Archer added: “On price, Todd seemed to admit that a 15x EBITDA multiple would be a fair price.”
Merrill Lynch then moved to clarify Archer’s note by saying Stitzer’s comments were made in the context of comparing other transactions in the industry. The bank added that Stizter was not implying a fair value for the business.
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By GlobalDataThe investor note, which was picked up by Reuters, sparked speculation that a deal was perhaps more likely than previously thought, with Cadbury’s tone softening.
However, today’s statement by Cadbury insisted the commentary on the remarks “misconstrued” Stitzer and did not imply a “softening of his view”.
“For the avoidance of doubt, Mr Stitzer does not believe that Kraft’s proposal makes strategic or financial sense for Cadbury and his comments should not be interpreted in any other way. Cadbury’s position in relation to Kraft’s proposal remains precisely as set out in the letter to Kraft issued on 12 September,” the company said.
That day, Cadbury issued a strongly-worded letter written by chairman Roger Carr to Kraft CEO Irene Rosenfeld in which he said said a sale to the US food giant was “an unappealing prospect”.
It was claimed this week that Cadbury had approached the UK Takeover Panel to force the Kraft to “put up or shut up” on its attempt to acquire the business.
Reports suggested Cadbury had approached the panel to either force Kraft to put a formal offer on the table or walk away from the move for six months.
