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AND
KRAFT
Roger Carr.
Krafts offer is fundamentally undervalued and made no strategic
RESISTANCE TO TAKEOVER!!
which was seen as the last line of defence to reject Krafts bid.
It reiterated the boards opinion of Krafts derisory offer, attacking
Krafts management and revealing that it beat its own target for operating
margins in 2009
Carr mentioned that Krafts latest offer was even more unattractive than it
was when Kraft made its formal offer in December.
At this point, attempts to thwart the completion of the deal were
becoming increasingly futile.
The final straw came when Franklin Templeton, a large mutual fund with
a 7 per cent stake, indicated it would accept an offer of 830p (8.30).
But soon after the deal was done, it announced a U-turn and shut the factory.
Further announcements of job cuts in Cadbury came in the
Aftermaths
In the end, evidencing its limited powers, the Takeover only criticized
Kraft for breaching Rule 19.1 of the Takeover Code (regarding the
standards of announcements and statements made by bidders during
the course of offers).
In addition, as a consequence of such case, some minor amendments
were made to the Takeover Code and the Cadbury law was proposed.
Cadbury law proposed to require a super majority of votes in the
Conclusions
It has been said that in the Kraft-Cadbury transaction, the
Other Aftermaths
Fairtrade Dairy Milk chocolate bars were launched in July 2009.
The Fairtrade Foundation has begun urgent talks with Cadbury's executives to see if the
that simultaneously there should be a rule that those who bought shares during the course of any
takeover battle would not be permitted to vote until the battle was over.
50m investment in Bourneville, was welcomed, in spite of job cuts as it was a necessary step
clock ticking immediately, forcing which bidders to table a formal offer or walk away for six
months.
Not only Bourneville its oldest brands, but one that pays homage to the
the much loved biscuits were cut by 11g, which equates to around two
fingers.
It all depends on how much you trust management to make the right decision. The end result is that, so
long as enough cash financing is available, acquirers can easily structure their deals to avoid taking them to
their own shareholders.
The statutes relevant to Corporate Takeovers in the US are: Williams Act, 1968: This Act requires Company negotiating takeover to meet
TAKEOVER FUNDAMENTALS IN UK
In 1968, City Code on takeovers and mergers was drawn up and
KEY TERMS
Initial threshold limit: Increase in threshold limit, from 15% to 25%,
Voluntary open offer: The acquirer holding 25% or more voting rights in
the target company can make a voluntary offer for at least 10% of the
total shares of the target company.
Total shareholding of the acquirer post open offer should not exceed
maximum permissible non-public shareholding (generally 75%).
The acquirer should not have acquired shares of the target company in the
preceding 52 weeks without attracting open offer obligation.
CONCERNED PEOPLE
PACs -persons who, with a common objective or purpose of acquisition of shares,
directly or indirectly co-operate for the acquisition of shares or voting rights in, or
control over, the target company.
The shares or voting rights held by PACs are aggregated with those of the
acquirer for the purpose of computing triggers, shareholding and creeping limits
under the Takeover Regulations.
Shareholder Involvement: Institutional investors in the minority position have
The Board of Director also is required to pass the M&A in the meeting of the board and not by
circulation.
The shareholders are also required to be given the report on valuation of shares along with the
10 per cent of shares in the company. Creditors can object to the scheme if and only if they
hold not less than 5 per cent of the outstanding debt
Minority squeeze out-The shareholders/ group of persons holding 90 per cent or more shares
have also been granted the authority to compulsorily notify their intention to acquire minority
shares and can subsequently acquire those shares.