Earlier today, the Street was abuzz with rumors that Kraft Foods (NYSE: KFT) was investigating the sale of brands such as Maxwell House and Oscar Mayer in order to raise capital to up its Cadbury (NYSE: CBY) bid to something a little bit sweeter (and one the confectionery giant might not reject). Kraft responded to the rumors saying they were just that - unfounded conjecture - and noted that it would not in fact need to ditch hot dogs and coffee for creme eggs and Trident gum. A spokeswoman for the company told Reuters "The financing for this proposal does not require any divestitures." So where did these rumors get started, anyway? Is Kraft protesting too much?
To recap: Last Monday, Kraft proposed to buy Cadbury for about $16.7 billion. Cadbury asserted its independence and rebuffed the offer, which was in fact below Cadbury's market value. As a result, analysts are expecting that Kraft may be looking to raise the bid in order for a buyout to be taken seriously.
In early-afternoon trading, KFT shares are flat at $26.11 while CBY shares are fractionally higher at $52.37.
Beth works for The Options News Network (www.ONN.tv), which provides daily stock and options commentary. The above comments are not intended as trading advice.
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Reader Comments (Page 1 of 1)
9-15-2009 @ 4:47PM
Kevin said...
I believe you have an open tag at the end of the post causing all other text on the page to be italicized.