Cadbury: Way clear for Kraft, but shareholders divided

The path seems clear for Kraft’s takeover of Cadbury after the last remaining alternative contender for the Birmingham chocolate maker officially pulled out of the race.

Ferraro, he Italian firm which makes Nutella and Tic-Tacs, was considering a joint bid with Hershey until the US group threw in the towel.

But Kraft’s £12 billion takeover has still to be accepted by Cadbury’s shareholders, who appear divided over the terms of the offer. Some are maintaining the sale undervalues the confectionary giant.

Principal investors include Neptune Investment Management, Legal & General and Standard Life.Neptune described the offer “as unappealing at best” while L&G said the offer “does not reflect the value of the company”. However, Standard Life has indicated it would vote in favour of the takeover.

Ratings agency Fitch cut the credit ratings of both Cadbury and Kraft to the lowest level investment grade, BBB-.

Meanwhile, Cadbury’s pension fund trustees are in talks with Kraft over the security of the chocolate maker’s 100 year-old pension fund.

Members are looking for assurances that Kraft and its £7 billion debt would not threaten the retirement scheme. There had also been concerns that the pension fund’s £500 million liability would threaten the takeover bid, which union Unite is still trying to block with a petition.