This is the second offer that Kraft made is much higher than the 745p which Kraft had made last September and that Cadbury had totally refused. The market was also expecting a move from either Ferrero or Hersheys as Cadbury preferred to be takenover in a friendly way (rather then in a hostile deal as Kraft tried to do in its initial approach) however both companies took to long to come up with an offer.
This deal did not go down really well with the famous US investor Warren Buffett who said that he had a lot of doubts on the deal. Kraft investors will not have the chance to vote on the deal, which involves the Kraft issuing 265m new shares, equivalent to about 18 per cent of its existing share capital, because that is below the 20 per cent level at which shareholder approval is required.
Mr Buffett, who holds more than 9 per cent of Kraft, said the company was worth more than its current stock price, which fell by 2 per cent at $28.72 in early Wall Street trading on Wednesday and hence the use of stock payment by Kraft make Cadbury's purchase a “very expensive deal”.
What do you think about the deal? Was it an ideal one or could Cadbury have made a better deal by waiting a bit more?