Kraft Foods will have to make a better offer for Cadbury, and soon
When on 7 September US food giant Kraft Foods’ management made an informal offer for UK chocolate giant Cadbury, for $17.6-billion, they probably expected it to be seriously considered. Actually, it was swiftly and flatly refused by the Brits. On top of that, the UK Panel on Takeovers and Mergers ruled on Wednesday that Kraft has until 9 November to come up with a decent offer, or walk away. Pundits are mostly in two camps, one that feels Kraft will offer around $19 billion just as the deadline expires (thus disabling possible competitive bids) or will just go home. The proponents for no increase in the bid remind us that Warren Buffet, Kraft’s biggest shareholder, believes that the present offer is fair. Only time will tell who’s right.