It seems Cadbury plc (NYSE:CBY) chief executive Todd Stitzer is warming up to the idea of a merger with Kraft Foods Inc. (NYSE:KFT).
After recently admitting there was some strategic sense to a deal, Stitzer may have
named his price at £12.2 billion ($19.9 billion). Bank of America Merrill Lynch sales specialist Simon Archer said in a note seen by Reuters, "On price, Todd seemed to admit that a 15x Ebitda multiple would be a fair price." That's about 20% higher than Kraft's unsolicited cash-and-stock bid of $16.7 billion.
Northfield, Ill.-based Kraft made the offer on Sept. 7 and was quickly rejected. Our sister blog Dealscape says most shareholders and analysts think
Cadbury is worth more than the 13 times Ebitda Kraft put on the table--especially compared with the 17.6x multiple in the Mars Inc.-Wm. Wrigley Jr. Co. deal. That deal got financing help from Warren Buffett--who, as the largest shareholder of Kraft says the Cadbury offer is "pretty full."
More recently Cadbury requested a "put up or shut up" order from the U.K. Takeover Panel. That will speed things up and may also unearth bids from Hershey Co. (NYSE:HSY) or Nestlé SA.
Stitzer and Kraft CEO Irene Rosenfeld had a chance to speak with each other at a two-day consumer and retail conference hosted by BofA Merrill in London but managed to avoid crossing paths. The Deal Pipeline (subscription required)
reports that the conference was conveniently structured so that no unwanted meetings need take place. -
Baz HiralalDealscape: Will Cadbury get a Hershey/Buffett bid?One way Kraft-Cadbury is like Mars-Wrigley
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