Stepping up its efforts to fend off a hostile takeover bid, Cadbury increased its profitability target on Monday and said Kraft’s offer for the British chocolate and candy maker was “derisory.”
Cadbury declined to say whether it is in discussions with Hershey, Ferrero or any other potential rival bidders, but Todd Stitzer, the chief executive, said the company had “received indications of interest from third parties.”
The Wall Street Journal, citing unnamed sources, reported Friday that the charitable trust that controls Hershey is pushing the Pennsylvania-based chocolate-maker to launch a $17 billion bid for Cadbury.
Last week, Kraft made a formal offer for Cadbury, reiterating its earlier $16 billion-plus bid for the company. Cadbury again decidedly rejected Kraft.
With Hershey seeming more likely to make an offer, a bidding war for Cadbury "is a definite possibility," said Erin Swanson, a stock analyst for Morningstar Inc.
Kraft Foods turned hostile in its bid for Cadbury on Monday, making a formal but unchanged takeover offer which now triggers a bid battle for the British confectioner which could last up to three months.
After Tuesday’s results, the food company, led by Irene B. Rosenfeld, reaffirmed its interest in Cadbury, but stressed that it would maintain a disciplined approach. Kraft said it would continue to deliver — with or without Cadbury. But acquiring Cadbury would help it on the growth front. In late October, Cadbury raised its forecast for revenue and operating margins and now expects sales to grow by about 5 percent.
Cadbury stepped up the pressure on Kraft yesterday to raise its proposed £10bn takeover offer after reporting unexpectedly strong third-quarter trading figures.
Chocolate maker Hershey Co., helped by price increases and lower costs, reported Thursday that third-quarter profit rose 30% from last year and its raised its full-year profit outlook.
Kraft Foods Inc., which this month proposed to buy Cadbury Plc, is poised to make an 11 billion- pound ($17.6 billion) hostile bid for the chocolate maker, the Observer reported, citing unidentified “City sources.”
“By no means does Cadbury management give the impression they want to remain independent, and they stress they want to maximize value to shareholders,” Merrill analysts and salesmen said in a note sent to clients during the London conference, which took place yesterday and today. “Cadbury indicated that the next step is for Kraft to make a formal offer, at hopefully a more attractive price.”
Kraft Foods Inc does not need to sell operations like Oscar Mayer hot dogs, Maxwell House coffee or any of its other brands to afford its $16 billion bid for British confectioner Cadbury, Kraft said on Tuesday.
Procter & Gamble Co. has unleashed the four-decade-old snack in a barrage of new flavors, shapes and sizes with new marketing even as speculation grows that Pringles could be among the next P&G brands to be sold or spun off.Associated Press
"More and more, we're hearing from Procter & Gamble that the food business doesn't fit in with the rest of their portfolio," said Ali Dibadj, an analyst with Sanford C. Bernstein, which hosted P&G officials at a New York conference in late May.
"Significantly improved" and increased marketing contributed to strong double-digit growth for Healthy Choice, Marie Callender's, Banquet and other consumer brands during ConAgra's fiscal 2009 fourth quarter, the company reported.
The Consumer Foods segment posted 13.8% sales growth (including 7% unit growth and 8% growth from pricing/mix), to reach $2.14 million during the quarter, which ended May 31. The division's operating profit increased 53%, to $271 million.
J.M. Smucker Co.'s fiscal fourth-quarter earnings more than doubled, propelled by the purchase of Folgers, an acquisition that is dovetailing with consumers' desire for a less expensive cup of joe.
Kraft reported profits up 10% for first-quarter 2009 to $660 million, for earnings per share of 45 cents, versus $559 million and a 39-cent EPS in last year's first quarter. The results exceeded analysts' projections by five cents.Media Post
CEO Irene Rosenfeld attributed the performance to price increases that better reflect input costs, with operational cost-cutting amounting to about $1 billion annually, and a simultaneous focus on marketing key brands/products and weeding out lower-margin product lines.
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