Kraft sweetens Cadbury offer, Nestle rules out bid
Wednesday, 6 January 2010
NEW YORK/ZURICH, Jan 5 (Reuters): Hopes of a takeover battle over British confectioner Cadbury receded as Nestle ruled itself out as a suitor and Kraft sweetened its hostile 10.2 billion pound ($16.4 billion) offer.
Shares in Cadbury fell as much as 2.4 per cent after Switzerland's Nestle, the world's biggest food group, said it did "not intend to make, or participate in, a formal offer" for
Kraft meanwhile sought to win over Cadbury shareholders by offering to use the full net proceeds from a $3.7 billion sale of its North American frozen pizza unit to Nestle to raise the cash portion of its offer by 60 pence a share to 360 pence. It kept the overall size of the offer unchanged by reducing the share element by an equivalent amount.
"Kraft Foods is doing this because of the desire expressed by some Cadbury security holders to have a greater proportion of the offer in cash," Kraft said in a statement. The US company added that some of its own shareholders had asked it be "more sparing" in its use of Kraft shares in its bid.
Shares in Cadbury fell as much as 2.4 per cent after Switzerland's Nestle, the world's biggest food group, said it did "not intend to make, or participate in, a formal offer" for
Kraft meanwhile sought to win over Cadbury shareholders by offering to use the full net proceeds from a $3.7 billion sale of its North American frozen pizza unit to Nestle to raise the cash portion of its offer by 60 pence a share to 360 pence. It kept the overall size of the offer unchanged by reducing the share element by an equivalent amount.
"Kraft Foods is doing this because of the desire expressed by some Cadbury security holders to have a greater proportion of the offer in cash," Kraft said in a statement. The US company added that some of its own shareholders had asked it be "more sparing" in its use of Kraft shares in its bid.