KRAFT SET TO MAKE INCREASED BID FOR CADBURY - Could chocolate maker, Cadbury become a Candy Maker? US food group Kraft is expected to launch a hostile £10 billion sterling plus cash and shares bid for Cadbury today, the deadline under takeover rules for a final and best offer. A previous bid was rebuffed by the board of Cadbury. A successful deal would create the world's biggest sweet company, ahead of Mars.
Justin Urquhart-Stewart, of Seven Investment Management, says that today is put up or shut up day for Kraft as the authorities tell them that they can not just keep on hanging around threatening to make a bid - they have to have a timescale for it. He says the previous bill Kraft came up with was a combination of Kraft shares and cash, but as a result of what has happened to Kraft shares, the bid value has actually dropped and the offer has become even less attractive. The analyst says that recent Kraft figures were not that appealing, while Cadburys has had quite good figures recently.
The analyst says that Kraft wants Cadbury for the simple reason that it has great brands. He says the success of the deal will come down to money and Kraft will have to up its bid substantially to as high as £8 sterling per share. However, he also says the firm could make a lower bid, which would be rejected, and which would mean that they would be prevented from making another bid for six months. Kraft could then just wait in the wings to see if any other company is interested and in half a year's time start the process all over again.
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BUILDING SECTOR CONTINUES TO SEE DECLINES - The Construction Industry Federation will today launch its bid for support in next month's Budget to stop the sector sinking further. But the latest Ulster Bank's monthly barometer of activity in the construction industry says activity and employment fell again in October.
Ulster Bank's economist Lynsey Clemenger says the latest index shows that the building industry remains very much in a state of decline. However, she says that this decline did ease back slightly from September's fall. She says it is disappointing to note that while the manufacturing and services purchasing managers indices are showing ongoing improvement from the period of pronounced weakness earlier in the year, the improvement in the building sector has stalled somewhat.
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MORNING BRIEFS - Aer Lingus says that total revenues for the three months to September 30 decreased by 9.7% compares to the same time last year. Aer Lingus added that average passenger revenues in the three months from July to September fell by 14.8% year on year. The airlines says cost increases in areas like fuel, as well as falling consumer spending in its main markets, mean a continuing programme of costs cuts in order to maintain balance sheet strength.
*** Who is going to succeed Eugene Sheehy as chief executive of AIB is a question that many feel has rumbled on far too long with the Department of Finance unhappy at the prospect of an internal choice as new CEO. But the bank is struggling to find an outside candidate prepared to accept a salary capped at €0.5m. Yesterday, the Sunday Business Post revealed current chairman, Dan O'Connor is set to become executive chairman of the bank taking charge of its day-to-day operations.
*** Japan Airlines says its 70 top executives will receive no pay in December as the struggling carrier needs to cut costs in the face of massive losses.
*** On the currency markets, the euro is worth $1.4960 and 89.27 pence sterling.
