Newspaper article The Journal (Newcastle, England)

Cadbury's Ready to Fight off Kraft's Hostile Bid

Newspaper article The Journal (Newcastle, England)

Cadbury's Ready to Fight off Kraft's Hostile Bid

Article excerpt

Byline: Iain Laing

US FOOD giant Kraft's hostile bid for Cadbury will be back in the spotlight in a week which is also expected to see some positive economic data.

Dairy Milk maker Cadbury is likely to be in fighting mood when it launches its defence against a pounds 10bn hostile takeover bid from US firm Kraft today. The firm's chairman Roger Carr has already dismissed Kraft's initial bid as derisory and not even remotely close to the true value of the firm. Cadbury will hope to convince its shareholders, including some 50,000 private investors, of its view that it has strong prospects as a standalone company.

Kraft values Cadbury at around 713p a share - equivalent to pounds 10.1bn - although Cadbury's shares have been trading around the 790p level recently. It is believed Cadbury is looking for an offer closer to 850p a share.

While Kraft recently disappointed with weak third-quarter results, downgrading revenues guidance Cadbury came out fighting with an impressive 7% hike in like-for-like sales.

It is thought the bid could smoke out offers from other firms and confectioners Hershey and Ferrero have already expressed an interest.

Another encouraging update is expected from leisure group Whitbread today as analysts eye continued improvement across its businesses. Whitbread - which owns the Costa coffee chain, Premier Inn budget hotels and a pubs restaurant division - posted better than expected half-year results in October, with a 3% decline in underlying pre-tax profits to pounds 118.2bn.

Its quarterly results are predicted to show the continuation of strong trading at Costa, which produced a 70% rise in operating profits in the six months to August 27 on revenues up 21% to pounds 155.4m.

Music group Chrysalis is expected to move into profit when it releases its full-year figures on Thursday, after chart successes from current artists as well as re-released Beatles recordings. …

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