Cadbury CEO Doesn't Expect Kraft To Walk Away - Analyst
23 September 2009 - 11:33PM
Dow Jones News
Cadbury PLC's (CBY) chief executive doesn't expect Kraft Foods
Inc. (KFT) to walk away from its bid for the U.K. confectioner and
sees his job as getting as much value as possible from a deal, a
Bank Of America analyst said Wednesday following a meeting with the
Cadbury boss.
Cadbury's Todd Stitzer was speaking to investors in London and,
although the firm has yet to disclose Stitzer's comments, BofA
analyst Simon Archer summarized them for clients in a note
Wednesday.
"Todd admitted that there is some strategic sense in combining
the two companies and he doesn't expect Kraft to walk away, so he
said his job is to get as much as value as possible," said
Archer.
If accurate, this marks a softening in Cadbury's stance. Just 10
days ago, Kraft was dismissed as a "low-growth conglomerate" and
its bid "unappealing" by Cadbury Chairman Roger Carr in an open
letter to Kraft.
Stitzer still had problems with the value of Kraft's GBP10.2
billion bid, however, describing the projected $625 million
synergies as "modest," and pointing out the higher earnings
multiples paid in recent deals in the sector.
Archer also quoted Kraft Chief Executive Irene Rosenfeld at the
same conference as saying that Cadbury was "quite a compelling
opportunity but not at any price."
Stitzer said the ball is now Kraft's court, according to
Archer.
Kraft has so far pledged to continue working toward a
recommendation from Cadbury for its bid despite a swift rejection
from the Cadbury's board.
-By Michael Carolan, Dow Jones Newswires; 44-20-7842-9278;
michael.carolan@dowjones.com