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Hot Stocks: With Alcon Sold, Will Nestle Try to Outmuscle Kraft in a Bid for Cadbury?

Is a bidding war brewing for Cadbury PLC (NYSE ADR: CBY)?

In a widely anticipated move, Nestle SA (PINK: NSRGY) said yesterday (Monday) that it would sell its remaining 52% stake of Alcon Inc. (NYSE: ACN) to Swiss drug maker Novartis AG (NYSE ADR: NVS) for about $28 billion. That influx of cash could give Nestle the financial firepower to go up against Kraft Foods Inc. (NYSE: KFT) in a competing bid for Cadbury.

Nestle is always "open to acquisition opportunities if they fit strategically," Chief Executive Officer Paul Bulcke told The Wall Street Journal in September.

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Dubai Gets $10 Billion Bailout; Citi Unveils First TARP Payback Plan; Cadbury Formally Rejects Kraft Offer; British Airways Cabin Crews to Stage Holiday Strike; Obama to Banks: Help the Economy Recover; Online Shopping Grows 3% Over 2008; Chinese Automaker Buys Saab Platform Technology; Toyota to Release Plug-In Hybrid in 2011
  • Debt-laden Dubai got a $10 billion bailout from neighboring Abu Dhabi, boosting global markets but raising questions about the undisclosed terms of the deal, Reuters reported. The fund will enable state-owned investment vehicle Dubai World to repay a $4.1 billion bond its real estate developer Nakheel PJSC was due to honor yesterday (Monday). Despite the bailout, credit ratings agency Fitch Ratings Inc. called Abu Dhabi's support only " a tactical step to permit an orderly restructuring of obligations within Dubai to continue."

  • Citigroup Inc. (NYSE: C) formally laid out its plans to repay $20 billion in Troubled Asset Relief Program (TARP) loans, which includes selling about $17 billion in common stock and about $3.5 billion of securities that turn into common shares. The TARP payback leaves Citi with a balance of roughly $15 billion, meaning it is still under the U.S. government's thumb. "They're still in the government's embrace. It's just not a bear hug now," Anton Schutz, president of Mendon Capital Advisors Corp., which owns Citi shares, told Reuters .

  • Cadbury PLC's (NYSE ADR: CBY) board of directors unanimously rejected Kraft Foods Inc.'s (NYSE: KFT) $16.2 billion bid, calling it "wholly inadequate." While no competing offers have materialized yet, Cadbury has "had indications of interest from third parties on possible business combinations," Chief Executive Officer Todd Stitzer said in a conference call, declining to name any companies. The Hershey Co. (NYSE: HSY) as well as Nestle SA (PINK ADR: NSRGY) have been reported as potential competing suitors, but unless a company comes forward with a bid, Cadbury's shareholders - which have until Feb. 2 to approve or reject Kraft's bid - may green light Kraft's offer. "We're not overwhelmed by Cadbury's defense…This is not enough to squeeze a massively higher offer from Kraft in our view," James Edwardes Jones, an analyst at British broker Execution Ltd.told Reuters. "It is difficult to see why Kraft needs to pay up much more than 800 [pence]." Kraft's bid is about 727 pence per Cadbury share, and most analysts believe it needs to pay 820-850 pence to buy Cadbury.

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Battle for Cadbury Gets Sticky as Hershey & Italy's Ferrero Mull Offer

Hershey Co. (NYSE: HSY) and Italian-based confectioner Ferrero SpA are considering a possible bid for U.K. candy giant Cadbury PLC (NYSE ADR: CBRY), raising the potential for a costly bidding war. But should a battle take place, U.S. food giant Kraft Foods Inc. (NYSE: KFT) is still the odds-on favorite.

Hershey, the maker of Reese's Peanut Butter Cups, said in a statement it's “reviewing its options,” leaving open the door to an offer but not saying one would be forthcoming. Ferrero, the Italian maker of Tic Tacs and Nutella spread, said it was in “preliminary stages of evaluating its options in respect to Cadbury,” according to Reuters.

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Kraft's Bid for Cadbury Not Sweet Enough

Kraft Foods Inc.'s (NYSE: KFT) $16.7 billion unsolicited takeover attempt of Cadbury PLC (NYSE ADR: CBY) is the latest sign of consolidation in the highly competitive food industry, and will likely lead to two things: A bidding war for Cadbury and further consolidation in the sector. The world's second-largest foodmaker went public with its bid […]

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