omagh Posted January 18, 2010 Share Posted January 18, 2010 Kraft and Cadbury agreed to a deal late this afternoon. http://dealbook.blogs.nytimes.com/2010/01/18/kraft-and-cadbury-near-a-friendly-deal/#more-167519 Link to comment Share on other sites More sharing options...
Parsad Posted January 20, 2010 Share Posted January 20, 2010 They've overpaid by $3B! They'll get their money back, but better returns could have been had elsewhere. Cheers! Link to comment Share on other sites More sharing options...
Guest dealraker Posted January 20, 2010 Share Posted January 20, 2010 Parsad, I respect writing and your opinion and I love this website. I disagree on the CBY price. Time will certainly tell (he he he) but I think Kraft did well and I think CBY will benefit from KFT's involvement. I have owned CBY for 10 years, buying at a little below $24 and again when it briefly dropped below $20. As I recall CBY dropped below $20 in the 2000 era (around then but I can't really remember) because investors were selling everything they owned to buy tech, including the braces off their children's teeth! Ha! Later. Link to comment Share on other sites More sharing options...
Guest dealraker Posted January 20, 2010 Share Posted January 20, 2010 Parsad, Also I bought $340,000 of Kraft at $26.50 about a month ago so I'm not saying it was a good deal simply because I owned CBY. I have seen a lot of food co mergers that do work and of couse and a believer this one will too. deal Link to comment Share on other sites More sharing options...
Parsad Posted January 20, 2010 Share Posted January 20, 2010 Parsad, I respect writing and your opinion and I love this website. I disagree on the CBY price. Time will certainly tell (he he he) but I think Kraft did well and I think CBY will benefit from KFT's involvement. I have owned CBY for 10 years, buying at a little below $24 and again when it briefly dropped below $20. As I recall CBY dropped below $20 in the 2000 era (around then but I can't really remember) because investors were selling everything they owned to buy tech, including the braces off their children's teeth! Hi Dealraker, The deal will work out fine for both parties, but Cadbury certainly got the better end of it. I would not have paid that much, regardless of any sort of synergy the two CEO's think they will generate. Cadbury earns about $800M annually...KFT paid almost 25 times earnings, and it's actually even worse because they used alot of undervalued KFT stock. Cheers! Link to comment Share on other sites More sharing options...
Guest dealraker Posted January 20, 2010 Share Posted January 20, 2010 Cadbury will become immensely more profitable. I have been somewhat jolted to see how little profit they make compared with others in the business. Link to comment Share on other sites More sharing options...
Rabbitisrich Posted January 20, 2010 Share Posted January 20, 2010 Buffett just gave an interview on Squawk Box where he said that he did not support the deal. He noted that Kraft sold their pizza business to Nestle for 9x pre-tax earnings, and that it did not make sense to purchase Cadbury at 13x EBITDA. Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now