Kraft says holders of 1.5% of Cadbury shares back takeover offer
LONDON - Kraft Foods Inc. said yesterday that holders of 1.5 percent of the shares in Cadbury PLC have accepted its hostile takeover offer, but the US company may gain more support as its offer moves closer to Cadbury’s market value.
The gap narrowed Tuesday as the Swiss food company Nestle said it would not bid for Cadbury, Kraft offered more cash in an alternative - but not higher - offer, and billionaire Warren Buffett, Kraft’s biggest shareholder, warned against offering any more stock to sweeten the offer.
Kraft financed its enhanced cash offer by selling its US pizza business to Nestle.
The Wall Street Journal reported yesterday that people familiar with the matter said that Cadbury board members have held talks recently with The Hershey Co.’s board members to encourage a rival offer.
But Cadbury said yesterday it is not looking for a white knight to ward off Kraft. “Unless and until we have a credible offer that adequately reflects the strength of this business, there is nothing to comment upon,’’ Cadbury said in a statement.
London’s Financial Times called Buffett’s intervention “a blatant attempt to talk up the food group’s share price’’ - and if so, it worked. Kraft shares closed Tuesday up 4.9 percent, while Cadbury was down 3.2 percent, narrowing the gap between the Kraft offer and the market price for Cadbury shares.
Some analysts in London believe, however, that Kraft will have to bid more to seal a deal.
European Union regulators yesterday gave Kraft’s offer the green light, provided Kraft sells Cadbury’s Polish and Romanian chocolate businesses, which they said the company had offered to do to eliminate antitrust worries.
Cadbury shareholders have until Feb. 2 to decide whether to accept the $16.5 billion offer by Kraft or back Cadbury management’s determination to remain independent.
If Kraft cannot win support from a majority of shareholders by Feb. 2, it will be barred from making another offer for six months.
Kraft has until Jan. 15 to disclose any new information about its bid, and until Jan. 19 to revise its offer. Kraft shareholders meet Feb. 1 to vote on whether to issue up to 370 million shares to support the offer.
While Buffett’s Berkshire Hathaway, which owns 9.4 percent of the company’s stock, can’t squelch the deal with its vote alone, the influence of “the sage of Omaha’’ may sway others.
Cadbury dismissed Tuesday’s revised offer. “Despite this tinkering, the Kraft offer remains unchanged and derisory with less than half the consideration in cash,’’ it said.