By Daniel Costello
The latest move in Kraft Food's push for world domination came this morning, with the food giant launching a $16.3 billion hostile takeover bid for British candy company Cadbury after an initial bid earlier this summer passed without a deal.
Cadbury, which rejected Kraft's $16.7 billion offer in early September, spurned the deal again Monday within minutes.
"Cadbury is an exceptional standalone business," said Roger Carr, chairman of Cadbury, in a statement. "Kraft's offer does not come remotely close to reflecting the true value of our company, and involves the unattractive prospect of the absorption of Cadbury into a low growth conglomerate business model."
Kraft must now take its deal, which values each share of Cadbury at $11.95, a 26% premium over Cadbury's share price on the day of Kraft's initial offer in September, directly to shareholders. Kraft has 28 days to draft a proposal to Cadbury's shareholders and 60 days to round up a majority of shareholders to vote the deal through.
The dollar continued its recent fall, weakening against most major rivals today, after a weekend meeting of Group of 20 policymakers offered no support for the greenback.
Investors also took note of a report issued by the International Monetary Fund at the gathering in Scotland that said the dollar has moved closer to "medium-term equilibrium" but "still remains on the strong side." The dollar index , a measure of the greenback against a basket of rival currencies, fell 0.8% to 75.2, in trading Monday. The Euro traded above $1.50, its highest level in over a year.
And McDonalds Corp. reported moderately strong sales Monday, announcing global sales rose 3.3 % in October, topping many analysts' estimates. Sales at existing U.S. restaurants disappointed, falling 0.1 %, as competition from Burger King's $1 double-cheeseburger offer and other competitors' discount offers continue to eat into McDonald's domestic business. European sales rose 6.4% while sales in Asia, the Middle East and Africa rose 4.7 %.
categories: Morning Report