Cadbury Kowtow To Kraft

The board of Cadbury have accepted Kraft's 840p offer.

Cadbury chairman, Roger Carr, is quoted on Citywire:

"We believe the offer represents good value for Cadbury shareholders and are pleased with the commitment that Kraft Foods has made to our heritage, values and people throughout the world."

Doubtless the board would not have given in if they did not believe that they had the support of key shareholders. It should be noted that, when details of an initial offer were made public in September, hedge funds were more than keen to snap up shares in Cadbury.

However, whether all the shareholders are as happy with the deal remains to be seen.

The board were also advised by the banks that they would not achieve a better deal. It should also be noted that, on the assumption that the deal goes ahead, the banking advisers to Cadbury and Kraft will reap a windfall of £150M.

However, the support of the workforce is not guaranteed, given what Kraft's plans may actually be for the future of Cadbury.

Gordon Brown, fearful of his re-election prospects, made a grab for the headlines by saying:

"We are determined that the levels of investment that take place in Cadbury in the United Kingdom are maintained and we are determined that, at a time when people are worried about their jobs, that jobs in Cadbury can be secure."

All very nice and voter friendly, but there is nothing that he can do to stop Kraft doing whatever they wish with the company once they take ownership of it.