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Kraft, Cadbury in Bournville – DealBook

Kraft Foods’ $16.7 billion hostile offer for Cadbury has gotten plenty of attention today (even with the United States markets closed for Labor Day).

zyakaira notes: Bournville, where Cadbury’s originated and Cadbury’s rejected the bid which sent traders hankering for cjhocolate and made the stock rise 40% in anticipation. This is the first Billion dollar deal tabled in 2009 with Toblerone maker Kraft bidding for Cadbury’s across the pond. Hershey’s and Nestle can’t be white knights because of Anti trust regulations while others seem small fry. Kraft offers only 300p  (48c) in cash and 0.26 shares of Kraft per Cadbury share, leaving the UK based giant short changed. It also recommends that the integration of distribution etc will save the combined company a further $1 billion

But many are questioning how one investor in particular feels about the proposal: Nelson W. Peltz, the billionaire who holds sizable stakes in both Cadbury and Kraft.

Mr. Peltz’s investment vehicle, Trian Fund Management, owns a little over 3 percent of Cadbury shares and about 0.63 percent of Kraft stock, according to regulatory filings.

Long known as an activist investor, Mr. Peltz pressured Cadbury to dispose of its soft drinks unit, which the company finally did by spinning off what is now the Dr Pepper Snapple Group last year.

Mr. Peltz bought up a stake in Kraft two years ago, again applying pressure to the company’s management to boost performance. Since 2007, Kraft has sold off a variety of businesses, including its Post cereals unit to Ralcorp for $2.6 billion. (Kraft’s chief executive, Irene Rosenfeld, cited the company’s strengthening of its core food business in a conference call earlier today.)

It’s unknown whether Kraft or Cadbury has consulted with the investor. A spokesman for Mr. Peltz declined to comment.

via Kraft, Cadbury and the Peltz Factor – DealBook Blog – NYTimes.com.

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This entry was posted on September 8, 2009 by in Financial Markets, US and tagged , .

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