How much is Cadbury really worth?
Kraft, North America’s biggest food group, will step up its charm offensive in meetings next week to persuade U.S. investors to support its offer for UK confectionery company Cadbury. Cadbury is also expected to follow its rejection of Kraft’s approach with a value-based defense, looking to previous deals that paid higher multiples for similar assets. The two companies seem to have been set on a series of maneuvers from the standard unsolicited deal playbook. Kraft has already begun meeting with its own shareholders as well as Cadbury investors, according to a company spokesman. It is likely to play down the UK company’s ability to create value as a stand-alone entity. “The tone they’ll strike will be to say how much better Cadbury would be together with Kraft,” an investor who has stock in both companies said. He added that he thought Kraft would eventually improve its offer to 800 to 820 pence per share in order to gain access to Cadbury’s books, before increasing it again to around
