Cadbury’s stock dipped to an intraday low of 767.5p on the London Stock Exchange yesterday, well below the 771p at which Kraft’s cash-and-shares bid was valued at the same time.
Cadbury shares recovered to close marginally up at 776.5p, though the blip caused analysts to question how much Kraft would sweeten its offer.
“The proximity of the Cadbury share price to the Kraft offer price leaves the position nicely in the balance with everything to play for over the next couple of weeks,” said Charles Stanley analyst Jeremy Batstone-Carr.
However, he, like other analysts including Investec’s Martin Deboo, believes Cadbury shareholders remain unwilling to accept an offer priced at less than 800p per share.
Cadbury’s share price has tanked by 3.5 per cent after billionaire investor Warren Buffett, a 9.4 per cent Kraft shareholder, on Tuesday said he was unhappy with the amount of stock being used to fund the bid. Kraft has until 19 January to launch a better offer, under Takeover Panel rules.
Cadbury is also said to be in talks with US chocolatier Hershey over a potential rival bid, though the company has been quick to deny it is “looking for a white knight”.