Kraft Takeover Offer Accepted by Cadbury Board
January 19, 2010
(ChattahBox) — Kraft Foods announced the details Tuesday for the takeover of British chocolate and chewing gum company Cadbury, whose board unanimously recommended the deal to its shareholders. Kraft Foods ended more than four months of acrimonious battle by raising its bid Cadbury to an 11.9 billion-pound ($19.7 billion) takeover offer.
Under the final terms of the bid, Kraft, the U.S. food giant, is offering Cadbury shareholders 500 pence cash and 0.1874 new Kraft shares for each share of the British confectioner. In all, Kraft will pay 840 pence, or $13.80, a Cadbury share. Kraft said in a statement today. Cadbury will also pay its holders an additional 10-pence dividend once the offer is unconditional. Cadbury shareholders are expected to support the deal. The revised bid is about 9 percent higher than Kraft’s previous bid of 769 pence, and consists of 40 percent stock and 60 percent cash. The offer is about a 5 percent premium over Cadbury’s closing share price of 807.5 pence on Monday. Earlier this month, Kraft sold its profitable North American pizza business to Nestle for $3.7 billion in order to fund a higher cash element in its Cadbury deal.