Cadbury white knight defence isn’t a cinch 7 Jan 2010 It would be nice to persuade Hershey to come in with an offer that trumped Kraft's hostile bid. But that's not going to be easy. With Kraft's own offer closing in on Cadbury's share price, the best the UK confectioner may be able to do is repromote its solo prospects.
Nestle shows itself a canny buyer and seller 5 Jan 2010 The world's largest food group is pocketing $28.1 billion by selling its stake in Alcon. Now Kraft's bid for Cadbury has given Nestle the chance to nab a dominant slice of the North American frozen pizza market. Nestle remains in a strong position to pick up other choice assets.
Buffett puts Kraft CEO in a bind 5 Jan 2010 The Sage's reproach of the Cadbury bid leaves Irene Rosenfeld with few palatable options. At best, she tweaks it to address Buffett's concerns about share issuance. At worst, the bid fails. Either way, she can't undo a rare public scolding from the world's most admired investor.
Kraft inches towards better Cadbury offer 5 Jan 2010 By selling its U.S. pizza business to Nestle for $3.7 bln, Kraft increases its firepower by only $1.3 bln. What's more, the offer hasn't been raised. Still, this could be a precursor to a more tempting bid.
Heineken cleans up on Globe mess 30 Dec 2009 Brewers aren't known for aggressive financial wizardry. But Heineken has made a tidy profit buying the distressed debt of a highly leveraged UK pub vehicle and seizing control. And the benefits to Heineken weren't purely financial.
Buy backs not big buys for cash-rich Nestle 21 Dec 2009 The world's largest food group is in the rare position of handing back cash to shareholders. A sale of its stake in eyecare firm Alcon next month could raise a further $28 billion. Nestle should stick to plan, extend its buyback programme and be wary of big acquisitions.
Miles away from a Marvellous Board at M&B 17 Dec 2009 The prospect of a 23 percent shareholder dictating the board composition of a big UK company has come closer with financier Joe Lewis's assault on pubs group Mitchells & Butlers. Next month's AGM looks set to be an odd clash between corporate governance and shareholder activism.
UK should resist calls to block RBS loan to Kraft 16 Dec 2009 MPs in Cadbury's home town want the government to stop majority stateowned RBS financing Kraft's hostile bid for the confectioner. Such interference would rob the bank of credibility among its corporate customers and make a mockery of the idea that RBS is independent.
Leading UK politician makes poor case for Cadbury 4 Dec 2009 Peter Mandelson has warned against investors trying to make a fast buck on the battle for the UK confectioner. The powerful minister may have caught the public mood, but Cadbury is the wrong company to try to protect. Still, his threats make a hostile takeover less likely.
Hershey investors should beware Cadbury bid math 24 Nov 2009 To buy the UK confectioner, the U.S. candy company would need to raise $6 blnplus of equity while still allowing the Hershey Trust to retain firm control. The financing math could work, but investors should demand serious sweeteners before handing Hershey any cash.
Hershey’s advantage over Kraft: irrational owner 22 Nov 2009 With fewer resources and synergies from a deal, Hershey would need to stretch so precariously to buy Cadbury it could risk its controlling trust s raison d être. Still, never underestimate a shareholder whose priorities differ from those of, say, Kraft holder Warren Buffett.
Cadbury carve-up looks a long shot 18 Nov 2009 Hershey of the US is reportedly mulling a joint bid for the UK confectioner with Italy s Ferrero. Incumbent bidder Kraft should not feel too threatened and Cadbury shareholders should not start pricing in an auction.
Can a poison pill be good for shareholders? 17 Nov 2009 Restrictions to thwart takeovers usually benefit managers, not shareholders. Mead Johnson may be an exception. The baby formula maker should make a tasty target. But the technicalities of Mead s ongoing splitoff from BristolMyers mean it may make sense to delay any auction.
Kraft incites Cadbury holders to rise up 9 Nov 2009 By formalising its £10bn bid the US group is hoping the UK confectioner s shareholders will lobby the board to talk. Without adding a penny yet that s risky. But it also brings in arbs whose view of value is simply a profit. That could shift the outcome in Kraft s favour.
Ghost of Carr’s last deal haunts Cadbury defence 9 Nov 2009 The chocolatier's chairman plotted the most recent winning UK hostile bid: Centrica s £1.4bn takeover of Venture Production. Now Roger Carr must taste his own dish. Kraft s cheeky hostile offer for Cadbury seems inspired by that very deal.
Kraft’s humdrum results highlight Cadbury charm 4 Nov 2009 The Oreomaker beat profit estimates for the third quarter, but cut its sales forecast for the year. That makes fastergrowing Cadbury even more attractive. Yet Kraft would still struggle to justify raising its offer for the UK confectioner much more.
SAB will struggle to make Femsa refreshing 2 Nov 2009 The South African brewer is the frontrunner to acquire Mexico s Femsa for some $7.5bn. It could easily finance the deal and Femsa would fit well with its emerging market portfolio. But getting the numbers to work for shareholders won t be easy.
Heineken in Mexican standoff – with itself 27 Oct 2009 The Dutch brewer probably can t finance Femsa's $7.5bnplus price tag with debt alone. To buy its Mexican partner, the familycontrolled brewer would need to issue equity. Rob Cox and Aliza Rosenbaum show how it can do so without the family losing control or spending a euro.
Dole IPO poor omen for LBO re-equitisations 23 Oct 2009 The food company priced its offering below the anticipated range. Investors appeared worried about Dole s debt, among other things. Its performance may serve as a warning to private equity funds hoping to unload assets still lumpy with leverage.
Cadbury’s Q3 puts little new pressure on Kraft 21 Oct 2009 The UK confectioner has lifted revenue and margin guidance. Anything less would have been a big setback in its defence against Kraft s unwanted £10bn approach. Kraft now has a convenient excuse to raise its lowball offer but shouldn t stretch itself.