Research Update: Ugrade of Nestle Implies No Cadbury Bid
Looks like UBS does not expect Nestle (NESN) to enter the bidding for Cadbury (CBRY). UBS analyst Alan Erskine upgraded the company on the basis that Nestle could return a third of its stock market value in buybacks and dividends over the next four years were it to start a new 25 billion-Swiss franc ($37.3 billion) share repurchase program. Erskine also expects Nestle will probably sell its stake in Alcon Inc. (ACL) “sooner rather than later,” potentially generating net cash of 8 billion Swiss francs by early 2010. Nestle has a put option to sell its 52 percent Alcon stake to Novartis AG (NOVN) between January 2010 and July 2011.
For previous ResearchRecap posts on Cadbury ahead of its six-month results due Wednesday, click here. For latest analyst comments, see Alacra Street Pulse.
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