Update: Could Unilever Enter the Bidding for Cadbury?
A short update to yesterday’s roundup of the state of Kraft’s pursuit of Cadbury.
No other bidders for Cadbury (CBRY) have emerged since Kraft’s (KFT) initial approach on Sep 7. Now FT Alphaville reports that Panmure Gordon analyst Graham Jones “thinks Unilever (UNA) should seriously consider offering 850p a share for Cadbury as it would be earnings enhancing and add meaningful exposure to what is already one of the best emerging operations in the consumers goods industry. He also thinks Kraft’s offer for Cadbury is ludicrously low.”
While Cadbury does not fit with the ‘bolt-on’ acquisitions ( Unilever CEO) Paul Polman has talked about, clearly such opportunities do not come up often and we would expect Unilever to be at least running the rule over Cadbury.
Reuters provides a preview of Cadbury’s six-monthly results due Oct 21, which are seen as a determining factor in Kraft’s formal bid and in perhaps flushing out other bidders.
The obstacles to other bidders have been outlined earlier on Research Recap. Reuters reports that “analysts believe a joint counterbid from Nestle (NESN) and Hershey (HSY) is possible rather than probable for Cadbury, so their third quarter results will be examined when both report quarterly earnings on Oct 22.”
The New York Post reports that Kraft is in talks with Sara Lee (SLE) to sell its Maxwell House coffee business. Morningstar said this was “a move we had expected the packaged food firm would consider in order to support a higher price or increase the cash consideration of its offer for Cadbury.”
For the latest analyst comment see Alacra Street Pulse.
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