cad

Remember Hulk Hogan and The Undertaker? That’s what springs to my mind everytime I read about the hostile tussle between Cadbury and Kraft. 

Just as I once stood in gaping disillusionment, at the sight of my favourite (then) WWF heroes playing “Family Guy” and worse, getting all chummy with each other backstage, I get a sense of impending loss as I watch yet another childhood icon being “robbed” from memories of my past.

That said, the Kraft-Cad (KC) tussle is unlike zero sum games that seemingly hostile wrestling matches are. In fact, loud whispers of a Win-Win KC deal are dominating talks across financial markets.

Here’s what you need to know about the sweet deal that’s currently lacing The Streets: 

  • Kraft upped its offer from 769 (below yesterday’s closing price of 834) to 850 pence a share. 
  • This includes 500 pence of cash, the rest in stock.
  • Cadbury shareholders will also potentially receive a dividend of 12 pence per share.

Why is this possibly a palatable deal?

  • Cadbury has a double-digit compound earnings growth ahead. With a forward earnings multiple of 15.5 times, it is estimated to be worth 682 pence on its own.The offer of 850p slaps a 25% premium for Cadbury shareholders. And the fact that it’s worth that much on its own bodes well for Kraft’s expansion mandate. In fact Kraft may even see bumper cost savings of 7.5% of Cadbury’s annual £6 billion sales revenue. 
  • The recent market rally in Cadbury’s share price during the course of the dramatic battle, priced in about 12% of the premium. Analysts’ estimates and ratings probably provide another 10%, implying an approximate 28% premium. (via ReutersBreakingview)

So all in all, we could see a positive sum game here… God willing.

But, is Kraft’s offer to Cadbury nothing more than an artificial sweetener? What do you think?

Sweet deals aside, I will still surely miss all that Cadbury stands for, especially its eyebrow raising advertisements.

Enjoy two of my favourites here:

1. Wouldn’t it be nice…

this catchy tune will forever be etched onto my cerebral cortex.

2. The Gorilla

Much as I’m an unofficial fan of the Bathing Ape (BAPE), my allegiance deviates slightly everytime I look at Cadbury’s very own furry “mascot”



 thangdynasty is a work-in-progress maintained by an accidental equity trader whose brief foray into the world of investments turned out… not so brief. Although unmotivated by the senseless pursuit of money in and for itself, she remains sadistically intrigued by the complex anatomy stealthily at work behind the whole spectrum of Markets – Fine Art, Financial, Fish and Fools. A budding art collector and supporter of emerging artists, she slogs to prevent collateral damage to her bank account resulting from occasional manic art buying sprees. thangdynasty joue au Poker avec les marchés financiers de jour et essaye de se racheter de nuit en se montrant a la autour de son nom.