The entire saga has been peppered with rumors of rival bids for Cadbury, and last week saw particularly ardent predictions that Hershey (HSY) would attempt to go it solo, but it's unlikely that had anything to do with Kraft's decision. Analysts had said all along that Kraft would need to offer at least 800 pence per share to persuade Cadbury stockholders, with some setting 840, 850 or even 920 as the absolute minimum. (Kraft's previous offer was worth about 765 pence per share, while the upgraded bid is closer to 840 pence.)
Furthermore, there was doubt as to whether Hershey could actually afford to top Kraft's bid, even at its original value.
Kraft shareholders may not be thrilled about the deal, but they don't have a say in the matter. Warren Buffett's Berkshire Hathaway Inc. recently warned against overpaying for Cadbury, but Kraft revamped the deal and made sure it would not issue enough new stock to require shareholder approval.
Related Stories on BNET Food:
- Kraft May Come to Regret Pizza Biz Sale
- Nestle Move Could Seal Cadbury's Fate
- Hershey and Ferrero's Cadbury Interest Unlikely to Push Up Kraft Bid
- Kraft Battle for Cadbury Takeover Just Beginning
- Bar Raised as Kraft Cadbury Bid Deadline Approaches
- More Drama and Mixed Messages in Kraft-Cadbury Flirtation
- Cadbury Warms to Kraft Bid, Pushes for Deadline
- Cadbury Chairman Insults Kraft in Open Letter
- Cadbury Playing Hard-to-Get?