Newspaper article The Evening Standard (London, England)

Punters Get Teeth into Cadbury on Talk of Bid

Newspaper article The Evening Standard (London, England)

Punters Get Teeth into Cadbury on Talk of Bid

Article excerpt

Byline: MICKEY CLARK

CITY speculators may have a sweet tooth, but that was not the reasonthey were chasing Cadbury today. Shares in the Dairy Milk and Halls Mentho-Lyptus group led blue- chips higher with a rise of 27 1 2 p to 709p amid claimsa bid may be on the way.

Despite recently demerging its softdrinks operations, Cadbury is still valuedat more than [pounds sterling]9 billion, a big mouthful for buyers with even the deepest ofpockets. One potential bidder is believed to be The Sage of Omaha, WarrenBuffett, who already owns a 3% stake. Another is US food giant Kraft.

Speculators say Cadbury is looking increasingly vulnerable to takeoverfollowing the demerger, and the recent [pounds sterling]11.5 billion takeover of chewing-gummaker Wrigley by Mars has only helped to fuel the rumours.

Shares generally traded above their worst levels of the day despite anotherovernight heavy sell-off in New York, where the oil price climbed above $135 abarrel. The FTSE 100 index, which has been continually finding support wheneverit dips below 6200, fell 6.9 to 6191.2.

The outlook for investors may appear far from rosy at present, but despite theuncertain future, they continue to snap up mining shares, which have enjoyed aphenomenal run over the past couple of years.

Perhaps comments from the likes of Sanford Bernstein encourage them.

Today it raised its price targets on Rio Tinto, up 119p at 6760p, BHP Billiton,40p dearer at 2106p, Xstrata, 81p ahead at 4218p, and Anglo American, 37phigher at 3552p. It believes they still offer good value for moneyparticularly those with significant bulk commodity exposure.

Sanford says soaring bulk prices are not a product of speculation, and coal andiron ore are not included in commodity indices. Top of its shopping list is bidtarget Rio Tinto, which it rates as outperform with a price target jacked upfrom 6800p to 8000p. It has lifted its target for potential suitor BHP from2000p to 2500p, rating the shares outperform. …

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