Cadbury non-executive directors are showing their confidence in the confectionery company by adding to their shareholdings. They swapped part of their quarterly directors' fees for the shares. The share buying came before Nestle said that it would not bid for Cadbury and Kraft increased the cash element of its bid.
Wolfgang Berndt bought 1,389 shares, Roger Carr acquired 1,621 shares, Colin Day purchased 741 shares, Guy Elliott added 1,332 shares to his shareholding, Baroness Hogg bought 556 shares and Lord Patten of Barnes acquired 1,158 shares. All the share purchases were at 803p a share. Raymond Viault acquired 359 ADRs at $51.95 each. The total investment by the directors was £66,000.
Swiss foods giant Nestle ruled itself out of the bid battle for Cadbury. Nestle has agreed to buy the North American pizza business of Cadbury's predator Kraft Foods for $3.7bn, which has allowed the US company to increase the cash element of its bid for Cadbury. Nestle would have found it difficult to surmount competition rules.
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Kraft's original £10bn offer was 300p in cash plus 0.2589 of a Kraft share for each Cadbury share. At a Kraft share price of $28.37 (1772p), the bid is worth 759p a share.
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Kraft intends to offer the alternative of 360p in cash plus part of one of its shares. The exact share element will depend on the Kraft share price and be set on 19 January.
Not all Kraft shareholders are happy with the bid. Berkshire Hathaway, the investment vehicle of celebrated investor Warren Buffett, owns around 9.4% of Kraft's issued share capital. It has urged shareholders to vote against a proposal to authorise the issuance of up to 370m Kraft shares to facilitate the proposed acquisition of Cadbury.
Berkshire Hathaway said authorising the proposal would effectively give the Kraft board a blank cheque with which to increase its bid for Cadbury. "Kraft stock is a very expensive 'currency' to be used in an acquisition," Buffett said in a statement. He pointed out that the board of Kraft had spent $3.6bn in 2007 buying back Kraft shares at $33 each, "presumably because the directors and management thought the shares to be worth more."
Top Director Buys
Fieldbury (FIE) Director name: Mr Rory StearAmount purchased: 1,000,000 @ 2.20p Value: £22,000
Chrysalis Group (CHS) Director name: Mr Andy MollettAmount purchased: 20,000 @ 106.50p Value: £21,300
Legal & General Group (LGEN) Director name: Sir Sir Robert J MargettsAmount purchased: 20,107 @ 79.00p Value: £15,885
Cadbury (CBRY) Director name: Mr Roger CarrAmount purchased: 1,621 @ 803.00p Value: £13,017
Cadbury (CBRY) Director name: Mr Raymond G ViaultAmount purchased: 1,436 @ 807.48p Value: £11,595
Minera IRL (MIRL) Director name: Ms Courtney ChamberlainAmount purchased: 20,000 @ 56.80p Value: £11,360
Cadbury (CBRY) Director name: Dr Wolfgang C G BerndtAmount purchased: 1,389 @ 803.00p Value: £11,154
Sterling Energy (SEY) Director name: Dr Richard StabbinsAmount purchased: 7,223 @ 148.50p Value: £10,726
Cadbury (CBRY) Director name: Mr Guy R ElliottAmount purchased: 1,332 @ 803.00p Value: £10,696
Top Director Sells
Iimia Inv Trust (IIM) Director name: Mr Michael C PhillipsAmount sold: 100,000 @ 111.00p Value: £111,000
