Three confectionery giants eyeing Cadbury takeover
Wednesday, 9 September 2009
From Fazle Rashid
NEW YORK, Sept 08: Cadbury, Kraft, Nestle and Hershey's are all world famous confectionery giants. The last three Kraft, Nestle and Harshey's are eyeing Cadbury for a take-over. Kraft vainly made an offer of $16.7 billion takeover of Cadbury which the later rejected saying the offer was too low.
Kraft said it would pursue the take-over bid. Shares of Cadbury soared 41 percent in the day's trading in London and above the offer price indicating that investors expected a higher bid from Kraft or a proposal from a rival candy company like Nestle and Hershey. Some analysts said Cadbury could be worth as much as 43 per cent more than Kraft offered, the New York Times (NYT) reported.
Cadbury, Nestle and Harshey are famous chocolate and candy makers while Kraft is known for its chedar cheese. These names are familiar in Bangladesh as well. Kraft and Cadbury would together be worth $50 billion year in yearly revenue. Deal activity remains far below the giddy heights of the past. About $1.32 trillion worth of deals have been announced this year, NYT said quoting Thomson Reuters study. The figure is 37 per cent lower than the figure of the corresponding period of last year and 56 per cent lower than the figure of 2007.
A takeover would result in an annual pre-tax savings of $625 million in marketing spending, procurement and research and development. It would result in higher earnings per share after all transaction related costs were included.
The deal making activity have largely improved since the beginning of the year. The broad economic recovery has inspired confidence in corporate boards. Banks are gradually becoming willing to finance transactions for a broad range of companies. Bankers and lawyers agree that the financing markets will never return to the credit boom of 2007.
Meanwhile, the oil giant, Chevron Corporation conceded saying it had offered bribe to Ecuadorean officials to settle $27 billion environmental damage lawsuit against the oil company. Chevron has provided Ecuadorean and American authorities with a secretly recorded video of the magistrate accepting bribe. The judge denied any wrong doing.
In a separate development, the Group of Twenty (G20) leaders have agreed to adopt tough rules for banks. Banks in Europe would be asked to raise " tens of billions of euros in capital in coming months" The rules will force banks to substantially improve the quality and extent of capital buffers they hold to absorb future shocks. There will be ceiling on banks borrowing that could not exceed 25 per cent of banks assets.
French officials have made it crystal clear that President Sarkozy's outrage against scandal of bonuses notwithstanding Paris would not go it alone. "It is either everybody or no body", they said JP Morgan and Commerzbank have pledged $2.25 billion to support global trade financing sponsored by International Finance Corporation (IFC), the private sector arm of the World Bank. The beleaguered US bank Citigroup had earlier committed $1.25 billion to Globe Trade Liquidity Programme.
NEW YORK, Sept 08: Cadbury, Kraft, Nestle and Hershey's are all world famous confectionery giants. The last three Kraft, Nestle and Harshey's are eyeing Cadbury for a take-over. Kraft vainly made an offer of $16.7 billion takeover of Cadbury which the later rejected saying the offer was too low.
Kraft said it would pursue the take-over bid. Shares of Cadbury soared 41 percent in the day's trading in London and above the offer price indicating that investors expected a higher bid from Kraft or a proposal from a rival candy company like Nestle and Hershey. Some analysts said Cadbury could be worth as much as 43 per cent more than Kraft offered, the New York Times (NYT) reported.
Cadbury, Nestle and Harshey are famous chocolate and candy makers while Kraft is known for its chedar cheese. These names are familiar in Bangladesh as well. Kraft and Cadbury would together be worth $50 billion year in yearly revenue. Deal activity remains far below the giddy heights of the past. About $1.32 trillion worth of deals have been announced this year, NYT said quoting Thomson Reuters study. The figure is 37 per cent lower than the figure of the corresponding period of last year and 56 per cent lower than the figure of 2007.
A takeover would result in an annual pre-tax savings of $625 million in marketing spending, procurement and research and development. It would result in higher earnings per share after all transaction related costs were included.
The deal making activity have largely improved since the beginning of the year. The broad economic recovery has inspired confidence in corporate boards. Banks are gradually becoming willing to finance transactions for a broad range of companies. Bankers and lawyers agree that the financing markets will never return to the credit boom of 2007.
Meanwhile, the oil giant, Chevron Corporation conceded saying it had offered bribe to Ecuadorean officials to settle $27 billion environmental damage lawsuit against the oil company. Chevron has provided Ecuadorean and American authorities with a secretly recorded video of the magistrate accepting bribe. The judge denied any wrong doing.
In a separate development, the Group of Twenty (G20) leaders have agreed to adopt tough rules for banks. Banks in Europe would be asked to raise " tens of billions of euros in capital in coming months" The rules will force banks to substantially improve the quality and extent of capital buffers they hold to absorb future shocks. There will be ceiling on banks borrowing that could not exceed 25 per cent of banks assets.
French officials have made it crystal clear that President Sarkozy's outrage against scandal of bonuses notwithstanding Paris would not go it alone. "It is either everybody or no body", they said JP Morgan and Commerzbank have pledged $2.25 billion to support global trade financing sponsored by International Finance Corporation (IFC), the private sector arm of the World Bank. The beleaguered US bank Citigroup had earlier committed $1.25 billion to Globe Trade Liquidity Programme.