Wednesday, March 05, 2025 | 08:39 PM ISTहिंदी में पढें
Business Standard
Notification Icon
userprofile IconSearch

Deal to benefit Hershey more than Kraft Foods, says Cadbury CEO

Image

Bloomberg

Cadbury Chief Executive Officer (CEO) Todd Stitzer told investors that Hershey may get a bigger boost to earnings than Kraft Foods by buying the UK confectioner, according to three people who heard the statement.

Stitzer, 57, said Hershey could expect higher earnings per share even though a Kraft deal would present more cost-cutting opportunities, the people said. He was responding to a question yesterday at a lunch presentation with investors at the New York Palace hotel in Manhattan, part of a campaign to fight a 10.4 billion-pound ($16.8 billion) bid from Kraft.

Cadbury, based in London, held merger talks with Hershey in 2002 and 2007. It hasn’t publicly discussed the financial implications of a new Hershey bid until now. Hershey, maker of Reese’s Peanut Butter Cups and Hershey’s Kisses, and Ferrero SpA said they are reviewing options for Cadbury, the maker of Dairy Milk chocolate and Trident gum. Neither has made a bid.

 

Kraft said in September it expected to realise pretax cost savings of at least $625 million a year in the combination. Kraft, based in Northfield, Illinois, had net income of $2.9 billion in 2008, or nine times Hershey’s $311 million of profit. Hershey is based in the Pennsylvania town of the same name.

Stitzer’s presentation was part of a week-long Cadbury blitz in London and New York to persuade shareholders not to accept Kraft’s cash and stock offer, worth 733 pence based on Friday’s closing price. At the Palace, Stitzer offered Cadbury candy bars to hedge fund managers and served dessert made with the company’s Green & Black’s organic chocolate.

Cadbury dropped 5.5 pence to 786.5 pence on Friday in London. It’s traded above Kraft’s offer since September, signaling that investors expect a higher bid.

“Our offer represents the best immediate and long-term value compared to any offer available to Cadbury and its shareholders,” said Michael Mitchell, a Kraft spokesman. A Cadbury spokesman declined to comment and a message left for a Hershey spokesman wasn’t returned.

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Dec 20 2009 | 12:00 AM IST

Explore News