Kraft set to sweeten Cadbury offer, but unions fear a bitter ending

[Omaha Steve]

http://www.guardian.co.uk/business/2009/nov/08/job-fears-kraft-cadbury-takeover

Fate of hundreds of British workers hangs on the decision of major shareholders Warren Buffett and Nelson Peltz


Female workers at the Bournville factory in 1954. Photograph: Haywood Magee/Getty Images

The fate of Cadbury as a proudly independent confectioner, and the security of hundreds of jobs in the UK and Ireland, may hang on critical decisions taken this weekend by two towering figures in the stock-picking world: American billionaire investors Warren Buffett and Nelson Peltz.

The ageing investors, with 146 years between them, are both major shareholders in America's largest food conglomerate, Kraft Foods, which must decide by 5pm tomorrow whether or not to launch a formal takeover offer for Cadbury. In recent days the two investment gurus have been listening intently, but saying little, as Kraft chief executive Irene Rosenfeld delivers her latest behind-the-scenes acquisition pitch to shareholders.

Away from the rarefied tussle for investor support, a parallel, less seemly, public-image spat is raging over competing claims to be the best home for some of Britain's best-loved brands, such as Dairy Milk, Creme Egg and Bassett's Liquorice Allsorts. Felicity Loudon, whose grandfather Egbert Cadbury was managing director of Cadbury Brothers, last week suggested Kraft's aims should be blocked "for totally patriotic reasons".

Elsewhere, the likely impact on jobs, especially in Cadbury's home market, is also emerging as a battleground – not least after Kraft's pledge to reverse Cadbury's closure plans for its Somerdale factory in Keynsham and reinvest in UK chocolate production. Jennie Formby of the union Unite said that pledge was still being treated with "deep scepticism" after two meetings with Kraft had failed to see the US firm give "any concrete details to support its promise".

Back in the more sober investment world, shareholder support for a Kraft bid has been Rosenfeld's main focus in recent days. It is critical because Kraft's next move is still likely to be a takeover proposal structured so that Cadbury shareholders are offered payment mainly in the US firm's shares. While both Kraft and Cadbury insist they treat discussions with all major shareholders equally, most deal-watchers agree the views of the sharp-tongued Peltz and the charming but persistent Buffett are likely to prove pivotal in shaping the price of any offer.

There has been near silence from both Buffett and Peltz since Kraft announced in early September that it maintained an acquisitive interest despite Cadbury's decision to spurn a takeover approach valuing the chocolate, sweets and gum group at £10.2bn or 745p a share.

FULL story at link.

[vi5]

1. As a former Kraft employee....huh?

They had a confections business. They sold it. Their whole big thing over the past 2-3 years has been selling brands and divisions not within their "core competency".

So now they're buying another confections business?

It's amazing the floundering and flip flopping that occurs in corporate America sometimes.

[Deja Q]

2. If it works, don't break it. Oh but it's too expensive so let's break it and see what happens.