TEXT OF INTERVIEW
Bill Radke: Kraft Foods turned hostile today in its bid for British chocolatier Cadbury. Marketplace’s Stephen Beard is following all this in London. And he joins us live. Good morning.
Stephen Beard: Good morning, Bill.
Radke: Now, Stephen, Kraft made an informal bid for Cadbury back in September. That got rejected. This offer is for less money than the first one. How does that happen?
Beard: Because Kraft is offering a mixture of cash and shares. And Kraft shares have declined since September. Its latest figures have been pretty disappointing, so Kraft’s have dipped making this offer worth less.
Radke: But why didn’t Kraft work to raise its bid? I mean, the first bid was rejected for being too low. Why didn’t Kraft offer more?
Beard: Kraft itself is under itself from its own investors not to overpay for Cadbury. In particular, Warren Buffett, who has a stake in Kraft, has made it clear that $16 billion or so is probably about enough money for the British company. Kraft had to table this official bid today — before the end of today in fact — under British takeover rules. If it hadn’t, it would have to walk away from the bid and not come back for two days. So it seems that the deal here — for six months that is — is that it is now making an official bid. It will now sit back and see whether any rival bidders enter the fray.
Radke: And are there any other signs of rival bidders?
Beard: None so far. Some people say Nestle or even Unilever might join in, but none so far. This is going to be a very interesting month to watch.
Radke: Marketplace’s Stephen Beard, live in London, thank you.
Beard: OK Bill.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.