FeedTheBull | Stock Market News

Kraft's Bid for Cadbury

birdie31 — Mon, 09 Nov 2009 14:50:03 -0700

U.S.-based Kraft Foods Inc. Monday launched a formal hostile takeover bid for Cadbury PLC, taking its approach directly to the target's shareholders as the U.K. confectioner again rejected its approach.

Kraft's cash and shares offer values Cadbury at £9.8 billion ($16.3 billion). That is below the £10.2 billion initial approach from Kraft because Kraft's share price has fallen in the interim.

The initial approach was criticized by some Cadbury shareholders for being too low and was rejected by the company. Cadbury has now rejected the formal offer, saying it fundamentally undervalues the company.

Kraft backed its decision not to sweeten the offer by saying it hasn't seen any signs of a competing offer for the British company and it therefore offers the best value to Cadbury's shareholders.
The Offer Terms

The U.S. food giant said in a statement it was offering Cadbury shareholders 300 pence in cash and 0.2589 new Kraft shares for each Cadbury share, identical to the proposal rejected by Cadbury as too low at the start of September.

Kraft Monday said its offer, based on the closing share price of $26.78 per Kraft Foods share price on Nov. 6, values each Cadbury share at 717 pence.
What Happens NExt

According to U.K. takeover rules, by launching a formal offer Monday, Kraft has set in motion a 28-day deadline for it to publish a prospectus on the offer for Cadbury shareholders.

The U.S. company has as many as 60 days to collect enough shares to seal the deal from the day it publishes its prospectus.

Kraft, of Northfield, Ill., must make its final offer by day 46. It can increase the offer as many times as it likes up until this date, but not lower it.

Should another company launch a competing bid in the meantime, the takeover battle could drag on even further.

Cadbury for its part can issue new information which would have a material impact on the takeover situation up until day 39 of the offer period. This could include profit forecasts, a major disposal or a defensive acquisition.
The Current Situation

Cadbury Sept. 7 rejected Kraft's initial cash-and-share offer, worth 745 pence per share at the time and at around 722 pence at current values. Cadbury said it could offer its shareholders more value by pursuing its standalone strategy of organic growth and expansion abroad. It accused Kraft of being a "low growth conglomerate" that contrasted with its own strategy of being a pure play confectionary company.

Kraft's task of winning over Cadbury shareholders was made more difficult on Nov. 3 when the US company disappointed the market by lowering its forecast for 2009 organic revenue growth to about 2% from its previous guidance of around 3%. Although Kraft also raised its full-year earnings guidance, the group's shares fell in response.

Kraft wants to acquire Cadbury to gain better scale to compete with global confectionary competitors like Mars Inc. and Nestle SA. A deal would help Kraft boost sales by better tapping the rapidly expanding populations in developing countries. It says a takeover would offer Cadbury better global reach and would also preserve jobs at Cadbury's U.K. operations.

Kraft thinks it could achieve pretax annual cost savings of at least $625 million through a takeover, although achieving this would cost it about $1.2 billion in the first three years after a deal.
The Market

If Kraft succeeds in buying Cadbury, the combined group would rank as the world's second-biggest confectionary group behind Mars Inc.

Current market share (data from Euromonitor):

Mars 14.8%

Cadbury 10.3%

Nestle 7.6%

Hershey 4.8%

Kraft 4.5%
Other Considerations

Kraft's hostile offer for Cadbury could flush out rival bids. Analysts initially thought Nestle and Hershey Co. of the U.S. were the most likely to be interested.

Nestle Chief Executive Paul Bulcke has said that the Swiss company is always "open to acquisition opportunities if they fit strategically," but that its appetite is limited.

For Hershey, Cadbury offers the kind of global reach the Pennsylvania company needs to remain competitive, but analysts have said the company would struggle to get financing and would have to undo its complicated ownership structure to do a deal.
What They Said

"We remain convinced of the strategic merits for both companies of combining Kraft Foods and Cadbury. We believe that our proposal offers the best immediate and long-term value for Cadbury's shareholders and for the company itself compared with any other option currently available, including Cadbury remaining independent."
—Kraft Chairman and CEO Irene Rosenfeld

"The repetition of a proposal which is now of less value and lower than the current Cadbury share price does not make it any more attractive. As a result, the Board has emphatically rejected this derisory offer and has strengthened its resolve to ensure the true value of Cadbury is fully understood by all."
—Cadbury Chairman Roger Carr

Shore Capital's Clive Black expects a protracted bidding process, which he believes will result in a slightly revised offer. Investors would warm to an offer of between 800p-820p a share, and would much prefer a straight cash offer, he said.

VIX Sonar Thoughts

Know Your Options — Mon, 09 Nov 2009 13:45:31 -0700

With VIX expiration for November options on the horizon (next Wednesday), I'll be stalking the fear index in the coming days for a few potential plays. Given that the VIX is quickly becoming a tad oversold, we may have a short put play in the cards. It's only been a week since the VIX mega spike and boy have the tables turned. Kudos to anyone that had the guts to fade the spike via short calls, call spreads, short VXX et. al. Though I sold some SPY put spreads and shorted some VXX, it certainly wouldn't have hurt to have sold some more.

5 Reasons Why the Dollar Could Continue to Slide

greenfaucet.com — Mon, 09 Nov 2009 12:05:30 -0700

Freshly back from Australia, I am hardly surprised by the fresh wave of dollar weakness. Over the past few months we have talked extensively about why the dollar could continue to fall. As the EUR/USD cracks above 1.50 for the second time in 2 months and USD/JPY extends its losses below 90, there are many reasons why the overall trend in the dollar is still down.

Market Technical Analysis & Setups - Major Levels Coming Into Play As Market Floats On Weak Dollar

inthemoneystocks — Mon, 09 Nov 2009 11:56:16 -0700

Dollar Continues to Get Pounded at the Mid-Session

Forexhound — Mon, 09 Nov 2009 11:40:41 -0700

The U.S. Dollar continued to get pounded at the mid-session in a move that was triggered over the week-end when the G-20 finance ministers failed to discuss the weakness in the Dollar. In addition, the IMF issued a report basically saying the Dollar was overpriced versus Asian currencies especially the Chinese Yuan.

Increased Demand for Higher Yielding Assets Fuels Stock Market Rally

Futureshound — Mon, 09 Nov 2009 11:37:14 -0700

The weaker Dollar is triggering a huge rally in U.S. equity markets at the mid-session as aggressive investors seek higher yielding assets. Last week’s news that the Fed will leave rates unchanged for a “prolonged period” combined with the refusal by the G-20 to discuss the weaker Dollar and the IMF’s statement calling the Dollar overpriced is helping to ignite the rally.

Forex Market Outlook for November 9, 2009

traderplanet — Mon, 09 Nov 2009 08:09:05 -0700

A complete look at the week ahead in forex trading including a review of the main currency futures that drive the forex market.

Water WATER

windough-shopper — Mon, 09 Nov 2009 07:20:32 -0700

I noice the links do not work, sorry

But you can track down all the news

I expect even more definitive news

as per last PR

The worlds most precious resource, WATER and AMIN!
Home ›
Trust:2Votes:6Views:84After the close Friday, AMIN,

Made what I consider a major announcement. While details are scant and nothing definitive was announced, the direction they are pursuing seems promising.

Water the is the important resource and something no one can do without, unlike oil, gas etc, it is inexhaustible as the oceans have plenty, all we need is to make it drinkable, a tall task of course, but doable. I don't believe that if AMIN is interested in getting into the business they get into it with a me too type of product.

I don't believe they would have made this PR, if they were not going to follow up with deals, definitive deals

I believe this PR and forthcoming news releases portend major upside to the price

(Of course the valuable real estate holdings, at least $3-4 per share and HMDI will help as well)

HMDI link....... http://finance.yahoo.com/news/American-International-pz-184338793.html?x...
ITS A BUY!

Why the value of Kemah is sky high http://www.simmonsco-intl.com/files/Galveston%20Bay%20Foundation.pdf

http://finance.yahoo.com/news/American-International-pz-379396445.html?x...

Here is my POV, I don't know if its true, I am guessing, I am merely putting out my intuition! If AMIN were going into the water desalination biz with a me too type product, it would be good, and make the stock do well, but what if they are getting into it with a BETTER MOUSETRAP????? Then all hell breaks out with the stock price. SO you either have a good buy here (based on other factors as well), or you have an explosive upmove!

American International Industries, Inc. Plans to Expand Into Water Purification and Desalination Business

HOUSTON and KEMAH, Texas, Nov. 6, 2009 (GLOBE NEWSWIRE) -- American International Industries, Inc. (Nasdaq:AMIN - News) Chairman and CEO Mr. Daniel Dror announced that AMIN is aggressively studying new potential business opportunities through mergers, acquisitions and/or investments to expand and diversify its present business segments and increase profitably. This growth and expansion plan will have as its priority new, next generation businesses and technologies.

AMIN will utilize its experience, capital, contacts and market strength to identify potential opportunities in critical service and supply industries. The top two worldwide industries are in the energy sector, specifically petroleum and electricity, while the third largest industry worldwide deals with the supply of potable water to mankind. Water is critical to the survival of humanity and worldwide shortages may become more severe in the coming decades. As Global Warming causes adverse climate changes and current natural supplies of potable water are depleted in the USA and many other areas of the globe, millions of people and animals run the risk of dehydration and possible death, if alternative solutions are not developed. Agricultural farmlands may potentially become unproductive and barren if water is not available.

Current water purification, desalination and recovery technologies will become more important as world leaders plan to avoid catastrophic water shortages in the near future. AMIN has identified several companies that can provide economic, efficient, scalable solutions to the potable water shortages, and has commenced discussions and negotiations about potential merger, acquisition and/or investment.

AMIN expects to aggressively complete negotiations with the new entities and expects to announce the results within the upcoming days and weeks................IMO!

They wouldn't have said this if more positive news were not forthcoming!

As always do your OWN DD and verify everything and trust no one!

I am NOT PAID BY ANYONE TO PROMO THIS OR ANY STOCK, I OWN AMIN AND HAVE PAID FOR ALL SHARES AND HAVE BOUGHT IT IN THE MARKET PLACE!

Weaker Dollar Sends Gold to All-Time High

Futureshound — Mon, 09 Nov 2009 06:29:57 -0700

December Gold rallied to a new all-time high because of the weaker Dollar. Now that this market has pierced the $1100 barrier with conviction, look for this price to become short-term support.

Last week’s bearish unemployment report pressured December Crude Oil because of supply concerns, but the overnight rally in equities and the Euro are helping to give this market a boost this morning. Speculators are also betting that a hurricane near Louisiana shuts down refineries. This action would tighten up gasoline supplies.

U.S. Dollar Getting Trounced after G-20 Offers No Support

Forexhound — Mon, 09 Nov 2009 06:09:55 -0700

The U.S. Dollar is getting trounced overnight after the G-20 finance ministers failed to discuss the value of the Dollar, thereby, effectively offering no support. In addition, they decided to keep stimulus measures in place until the global economy can show sustained gains.

The real selling pressure hit the Dollar after an IMF report issued at the meeting said, “the Dollar has moved closer to “medium-term equilibrium” but “still remains on the strong side.” This statement was a shot at the Dollar being overvalued versus the Asian currencies particularly the Chinese Yuan. Aggressive traders seized this moment as an opportunity to increase selling pressure on the Dollar.

Stock Analysis: McDonald's Corporation (MCD)

bbkjbbkj — Mon, 09 Nov 2009 05:43:29 -0700

McDonald's Corporation is the largest fast-food restaurant company in the world. Its restaurants serve a varied, yet limited, value-priced menu in more than 100 countries around the world. Linked here is a detailed analysis and commentary.

Most Active Stock Options November 6, 2009 & Trading Activity

optionmaestro — Mon, 09 Nov 2009 00:24:01 -0700

Zecco Holdings Get $50 when you open a TradeKing account today.
Friday, November 6, 2009
Most Active Stock Options November 6, 2009 & Trading Activity
As of today the top ten option contracts traded were:

1. Volatility Index (VIX) January 22.50 Put Options
2. Volatility Index November 22.50 Put Options
3. Ford (NYSE:F) January 2011 5 Call Options
4. Ford January 2011 5 Put Options
5. S&P 500 SPDR (NYSE:SPY) November 105 Put Options
6. S&P 500 SPDR November 107 Call Options
7. PowerShares QQQ (NASDAQ:QQQQ) November 42 Put Options
8. Qualcomm (NASDAQ:QCOM) April 50 Call Options
9. S&P 500 SPDR November 107 Put Options
10. CB Richard Ellis Group Inc (NYSE:CBG) June 10 Call Options

By looking at the activity in the Volatility Index I would say this is more bullish than bearish. The..............

Diagonal Calendar Call Spread

jasonnoguchi — Sun, 08 Nov 2009 23:20:32 -0700

Diagonal calendar call spread tutorial: learn how to profit from neutral market conditions.

Reasons Why Investing in Film May Help Boost the US Economy & Create Jobs

AlternativeInvestmentGuru — Sun, 08 Nov 2009 21:43:57 -0700

With the nation on the brink of economic collapse, Wall Street panic at an all time high, and hedge funds and financial institutions disintegrating, New York based Elliott Associates has parked an additional $1 billion into Ryan Kavanaugh's Relativity Media which will finance a large slate of Universal Pictures' films over the next few years.

And the question remains "why?" in today's economic crisis as well as the recent pull out of billions of dollars in institutional capital from the studios.

No matter how bad things are in the world, people need to be entertained. And while the crowd mentality of panic in the U.S. financial markets exists, overseas, properly structured commercial films generate more revenues which add to bigger distributor buys with the Euro vs. USD.

Apart from Elliott Associates, other investors including billionaires,family offices from Wall Street to Silicon Valley to the Middle East to Russia have been parking their money into Hollywood

Investing in Film As a Non Correlated Asset Class Opportunity For Affluent Investors & Hedge Funds

AlternativeInvestmentGuru — Sun, 08 Nov 2009 21:40:07 -0700

As a non correlated asset class, films and film finance has outperformed every non correlated asset class in the world if you look at the more than $6 billion dollars poured into motion picture finance deals in the last 3 years, the IRR across the spectrum for both studios and independents are resilient to global economic declines in other industries.

When defense contractor Honeywell, New York Hedge Fund Elliot Associates, and Dune Capital invested more than a combined total of more than a billion dollars towards several different film funds, many pension funds, private banks, hedge fund managers, private equity groups, and high net worth investors and family offices started to follow suit enter the movie business.

Investors from Wall Street to Silicon Valley to the Middle East to Russia have been parking their money into Hollywood.