Business

Thursday October 22, 2009

Cadbury’s bumper Q3 puts pressure on suitor Kraft


LONDON: Britain’s Cadbury beat sales forecasts and raised targets in a bumper third quarter trading report, surprising investors and pressuring suitor Kraft to come up with a much bigger bid to win its takeover battle.

The London-based confectionery group said yesterday underlying sales rose 7% in the July-September quarter, beating even the most bullish forecasts, and unexpectedly increased both its sales and margin growth targets for 2009.

Cadbury said it expected 2009 sales growth of 5%, up from 4% previously, and its operating margin percentage to jump 135 basis points rather than its old target of 80 to 100 basis points.

Analysts expect shares in the Dairy Milk chocolate and Trident gum maker to open higher, which would force Kraft to consider making a knockout bid to win over the world’s second largest confectionery group.

Cadbury has repeatedly rejected Kraft’s £10.2bil cash and shares proposal made in early September, and the UK Takeover Panel has given Kraft a deadline of Nov 9 to come up with a firm bid or walk away for six months. — Reuters

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