Cadbury (CBY) Reports Robust 2009 Results
January 12, 2010 1:10 PM
Cadbury Plc. (ADR) (NYSE: CBY), the British confectioner, posted a surge in 2009 profits as it continues to fight a hostile bid by Kraft Foods Inc. (NYSE: KFT). Cadbury has sent out documents to shareholders urging them to reject Kraft’s offer.
Cadbury’s operating profit rose 27% to 808 million pounds on sales of 6 billion pounds. This is higher than the analysts’ estimate of 806 million pounds on sales of 6 billion pounds. Kraft’s cash and stock bid of 763 pence a share values Cadbury at 12 times 2009 EBITDA. According to Cadbury this is lower than the multiple for similar takeovers in the industry.
Cadbury shares fell briefly last week below the Kraft’s Food offer. Cadbury Chairman Roger Carr said that applying any comparable’s multiple would result in a value much higher than the Kraft offer. Mr. Carr said that Cadbury was open to an acquisition offer that reflected the true value of the company.
The Hershey Company (NYSE: HSY) has declined to comment on whether it will make a counterbid for Cadbury. Many analysts believe that the Hershey Company will find it difficult to fund the deal if it made an offer for Cadbury. Nestle has already ruled itself out of making a rival offer. Cadbury also forecasted an organic revenue growth within the range of 5% to 7% for 2010.
