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Old 09-07-2009, 11:22 PM   Nav to Top  #1
alcastleinnovations
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Post KFT - Kraft Foods Inc.

Company Name: Kraft Foods Inc.
Ticker: NYSE:KFT
Market Cap: 1070.04B
Company Profile: Kraft Foods is the world's second largest food company with annual revenues of $42 billion. For many years, Kraft Foods has been growing and developing well-loved brands, including: Terry's, Milka, Côte d'Or and Toblerone chocolates; Oreo, Ritz and LU biscuits; Kenco, Maxwell House, Carte Noire and Jacobs coffees; and Dairylea and Philadelphia cheeses.

I thought this would be a good stock to watch because their is a deal in the making regarding the takeover of British chocolate manufacturer Cadbury Plc (LSE:UK:CBRY.L)

The Transaction would create
* a company with approximately $50 billion in revenues;
* a global powerhouse in snacks, confectionery and quick meals, with an an exceptional portfolio of leading brands around the world;
* a geographically diversified combined business, with leading positions and significant scale in key developing markets including India, Mexico, Brazil, China and Russia;
* a strong presence in instant consumption channels in both developed and developing markets, expanding the reach and margin potential of the combined business;* and
* the potential for meaningful revenue synergies over time from investments in distribution, marketing and product development. In addition, there is a significant opportunity to realise pre-tax cost savings of at least $625 million annually. This is expected to be achieved through increased operational efficiencies over and above the current performance improvement programmes at Kraft Foods and Cadbury (including Cadbury's Vision Into Action ("VIA") programme). Kraft Foods expects that it will achieve the run-rate on these cost savings by the end of the third year following completion. Total one-off implementation cash costs of approximately $1.2 billion would be incurred in the first three years following completion.**

I am new to this forum and this is my first time posting so if I did anything wrong or could do something different to improve my post some feedback would be great. I know this is very well known information but I just wanted to get some thoughts and opinions.

Last edited by Miles; 09-08-2009 at 01:58 AM..
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Old 09-08-2009, 02:08 AM   Nav to Top  #2
Saintjames
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Great first post alcastle, was away at my cottage all weekend and never heard about this one. Just saw this in my rss reader, which leads me to believe their could be another offer coming:

Cadbury plc Rejects Kraft Foods, Inc.'s $16.7 Billion Bid-AP

Monday, 7 Sep 2009 05:28am EDT

Associated Press reported that Kraft Foods Inc. proposed a GBP10.2 billion ($16.7 billion) takeover of Cadbury plc, but the offer was immediately rejected by the Cadbur plc. Cadbury stated that the offer undervalued the company. The Company was undeterred, however, and said it would continue to seek a transaction which Cadbury's board could support.
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Old 09-08-2009, 03:08 AM   Nav to Top  #3
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Ouch.. think counter offering coming?
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Old 09-08-2009, 11:20 AM   Nav to Top  #4
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Click the link for the full article...

Via: http://www.reuters.com/article/newsO...5872RY20090908

ZURICH (Reuters) - Britain's Cadbury has few options but to look for a higher bid and more cash after Kraft's 10.2 billion pound ($16.7 billion) offer for the world's No 2 confectionery group, analysts said on Tuesday.

Investors like the logic of the combination and few, if any, counterbidders are seen likely to emerge, raising the pressure on Cadbury's management to do a deal at the right price.

Kraft launched its bid on Monday at 300p cash and 0.2589 new Kraft shares per Cadbury share, valuing the British group at 745p at Kraft's Friday closing share price, with the U.S. group seeing annual deal cost savings of $625 million.

"We expect Cadbury's management to mount an aggressive defense, but confess to seeing few options on the table as a standalone company that would get the share price to 745p, let alone if there were a higher offer," said Warren Ackerman at Evolution Securities.

The bid from Kraft on Monday is seen as an opening low shot in a bidding battle, and Cadbury's shareholders will not be keen on 60 percent of the price, or around $10 billion, coming in the form of Kraft's U.S.-listed shares, analysts said, adding that investors would prefer more cash.

"We think Kraft is underbidding the potential synergies and see the high Kraft equity component to the consideration as a deterrent for Cadbury shareholders," said Martin Deboo at Investec Securities.

JP Morgan expected a raised bid of 820p while Banc of America-Merrill Lynch saw 820-830p. The value of the cash and paper bid will fall if Kraft shares dip as they open later Tuesday for the first time since the bid. Kraft shares were down 2.1 percent in premarket trading on Tuesday.

Cadbury shares were up 2.2 percent at 800p at 1150 GMT (7:50 a.m. EDT) after a hefty rise of 38 percent on Monday when they touched 808p. Kraft shares did not trade on Monday due to a market holiday.

"We see the proposal of 745p as an opening shot by Kraft. A price of 850-875p, comparable with other major food deals, we think is needed to win the day," said food industry analyst Charlie Mills at brokers Credit Suisse.
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Old 09-08-2009, 09:00 PM   Nav to Top  #5
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Originally Posted by pdtpatrick View Post
Ouch.. think counter offering coming?
well, just found this interesting read...

Originally Posted by telegraph.co.uk
Kraft holds back in bid for Cadbury
The board of US food conglomerate Kraft is prepared to wait and let the market decide the fate of its £10.2bn bid for Cadbury rather than take the initiative and bring the rejected offer directly to its target's shareholders.

By James Quinn, US Business Editor
Published: 10:46PM BST 08 Sep 2009

Right mix: Kraft is prepared to bide its time for Cadbury Photo: Reuters
The board of US food conglomerate Kraft is prepared to wait and let the market decide the fate of its £10.2bn bid for Cadbury rather than take the initiative and bring the rejected offer directly to its target's shareholders.
Kraft's board, led by chief executive Irene Rosenfeld, is believed to be sceptical that a white knight bidder may emerge for the 185-year-old British confectioner.

Instead, it is believed to be prepared to hold off and let Cadbury's own investors pressure it into a deal with the company, which is best known in the UK for its processed cheese slices and its Philadelphia cream cheese brands.
Ms Rosenfeld's somewhat unusual strategy, coming after Cadbury's board rejected the 745p-a-share offer, is understood to be driven by her belief that the chances of a rival appearing to save Cadbury are slim.

Her thesis comes despite speculation that both Hershey's and Nestlé may be assessing their options. Hershey's has appointed JP Morgan in that regard, amid talk that the two may carve up Cadbury's business to avoid regulatory problems.

For the time being, however, Kraft – which was spun out of Altria in 2007 – is understood to have decided there is no need to make the bid a hostile one by speaking directly with Cadbury's investors.

A number of Cadbury shareholders are understood to have told the board that they believe the Kraft approach is generous, and urged them to publish some form of defence document quickly or face the consequences.

Ms Rosenfeld, who earned $17m (£10m) last year as she continued to restructure the US food company, spent much of yesterday speaking with her own shareholders and institutional analysts, explaining why she believes the deal is the right one, a task she will continue over the next few days.

On a conference call with analysts, Ms Rosenfeld said she was convinced that it would be difficult for Cadbury "to go it alone", adding that "scale will be an increasing source of competitive advantage both in confectionery and in the food industry at large".

Kraft also took the unusual step of rebuffing some of the claims made by Cadbury on Monday, with Michael Osanloo, Kraft's strategy chief, dismissing comparisons between the proposed deal and the merger of Mars and Wrigley last year, saying that the "world has changed dramatically" since then.

He went on to stress that Kraft is "the most logical buyer, but we will remain financially disciplined", suggesting that the current offer may not be raised substantially.

Merrill Lynch's Bryan Spillane said that the timing of the bid was a "surprise", coming at a key point in Ms Rosenfeld's restructuring of the business. He added that she "appears to be on the cusp of translating turnaround efforts into better and more consistent financial performance".
Mr Spillane also suggested she must show the underlying Kraft business is improving and "show fiscal restraint" in its approach to Cadbury.
Shares in Kraft slid $1.57 – a 5.6pc fall – to $26.53 on Tuesday, the first day of Wall Street trading since the approach was announced on Monday. Shares in Cadbury rose 3p to 786p.

via: http://www.telegraph.co.uk/finance/n...r-Cadbury.html
read the bold for a summary. oh and welcome to the boards alvaro!
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Old 09-09-2009, 04:00 AM   Nav to Top  #6
alcastleinnovations
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Hershey may not let Cadbury be swallowed up: WSJ

Hershey Co. may not let Cadbury PLC be acquired by Kraft Foods Inc. or another company without a response, according to a report in The Wall Street Journal, citing a source "familiar with Hershey's thinking." Hershey and Cadbury have had merger discussions in the past, the Journal said, and that one option could have Hershey teaming up with Nestle SA to make a joint bid. Other sources cited by the Journal said Hershey could face difficulties financing such a deal.

http://www.marketwatch.com/story/her...wsj-2009-09-07

Last edited by Miles; 09-09-2009 at 08:05 AM..
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