After all the hubbub and possible interest from the U.K.'s Takeover Panel over what Cadbury plc (NYSE:CBY) chief executive Todd Stitzer may or may not have said, the British confectioner
issued a statement hoping to clear all doubts about Cadbury's feeling about a takeover by Kraft Foods Inc. (NYSE:KFT).:
For the avoidance of doubt, Mr. Stitzer does not believe that Kraft's proposal makes strategic or financial sense for Cadbury and his comments should not be interpreted in any other way. Cadbury's position in relation to Kraft's proposal remains precisely as set out in the letter to Kraft issued on 12 September.It seems straightforward, reversing what Stitzer told The Wall Street Journal: "I would never say there's not some strategic sense in these businesses coming together." And Bank of America Merrill Lynch sales specialist Simon Archer cleared up his comments about Stitzer suggesting
15 times Ebitda or about $20 billion would be a fair offer from Kraft. Those comments could have meant
trouble with the Takeover Panel, but Archer said Stitzer was just talking about "comparable transactions being in the midteens -- he was not implying a fair value for the business."
Friday's statement points to a letter sent by Cadbury chairman Roger Carr to Kraft CEO Irene Rosenfeld. Carr has held steadfast about the Kraft bid undervaluing the company. In the letter, Carr talks about how awesome Cadbury is, saying the company has made strategic moves to become a pure-play confectionery company, having acquired Adams for $4.2 billion in 2003 and more recently, Intergum and Sansei. It also got rid of the beverage business. Of the merger proposal, Carr wrote, "Cadbury would be absorbed into Kraft's low growth, conglomerate business model, an unappealing prospect which contrasts sharply with our strategy."
But, toward the end of his letter, Carr writes, "Your proposal fundamentally fails to reflect the current value of Cadbury as a standalone business, its growth prospects and the potential synergies of a combined entity."
Hmm. So there
are a lot of potential synergies? So if Kraft were to raise its bid to a point where it
did reflect them, perhaps there would be a deal? Or at least a clarification of the clarification. -
Baz HiralalCadbury's sweet talk 'worries regulator'Stitzer wants 15 times Ebitda from Kraft?
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