Kraft earlier this month made a $16.7 billion stock-and-cash proposal that was rebuffed by the U.K. confectionary company. Cadbury has repeatedly said it is not interested in a takeover, but the U.S. food maker has said it remains focused on continuing negotiations.
According to the London paper, Northfield, Ill.-based Kraft is valuing Cadbury at 11 billion [image-nocss] pounds, or about $17.45 billion.
The U.K. takeover panel is expected to set a deadline soon for Kraft to put a firm offer on the table or walk away for at least six months. The company is reportedly putting the final touches on a financing package, which would enable it to offer about half the package in cash and half in stock.
Kraft is unlikely to walk away from Cadbury before making a formal bid because there are sound strategic reasons for the deal, added a Reuters report. For Kraft, the transaction is a natural extension of a product strategy to push into high growth and high margin areas.
Black expected Cadbury to be "courting counter bidders like mad" at the moment and sees the "often talked about combination of Nestle and Hershey Co" as the most likely source of that counter bid.
Shore Capital analyst Clive Black told Reuters that he expected Cadbury to be "courting counter bidders like mad" and sees the "often talked about combination of Nestle and Hershey Co" as the most likely source of a counter bid.
A senior banker said it would be strange for Kraft to go hostile before they have their financing in place.
"Market speculation suggests Kraft are not yet there on the financing. They could argue with the Takeover Panel that they need a longer period in which to make a bid to get the financing in place," the banker told Reuters.
One analyst covering Cadbury said he thought Kraft would go hostile eventually but added that the best thing for them to do would be to wait and see some of the air come out of the Cadbury share price rather than go hostile right away.
"If they go hostile, it will be toward the end of the Takeover Panel timeframe. They would do this hoping that the Cadbury share price has come down and to trigger a 60-day offer period," said another analyst.
Click herefor previous CSP Daily News coverage of the Kraft-Cadbury "dance."
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