DJ Cadbury CEO Did Not Imply A Fair Value For Business - Analyst
CBY | Quote | Chart | News | PowerRating -- Cadbury PLC's (CBY) chief executive didn't imply that a bid of 900 pence a share represented fair value for Cadbury's business, said Bank Of America/Merrill Lynch Wednesday, following reports suggesting Cadbury's view on the GBP10.2 billion Kraft Foods Inc. (KFT) bid had softened.
A story from Reuters earlier Wednesday, based on a BoA research note, said Cadbury Chief Executive Todd Stitzer had "named his price" for a successful deal at 15-times the company's current year earnings - or around 900 pence.
In a clarification note, BofA analyst Simon Archer said: "Todd's comments were only in the context of comparable transactions being in the mid-teens - he wasn't implying a fair value for the business."
Stitzer was speaking to investors at a conference in London Tuesday.
Kraft's original bid valued Cadbury at 745 pence a share, or GBP10.2 billion, though a fall in Kraft's share price since the announcement means that valuation is now closer to 700 pence.
Analysts have argued that recent deals such as U.S. rival Mars' acquisition of Wrigley were at much higher multiples than the 12-times earnings Kraft is offering for Cadbury.
It was in reference to such deals that Stitzer made his comments.
-By Michael Carolan, Dow Jones Newswires; 44-20-7842-9278; michael.carolan@dowjones.com
(END) Dow Jones Newswires
09-23-09 0818ET
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