Kraft Reportedly In Talks To Finance Bid To Buy Cadbury (KFT,C)

9/9/2009 - Kraft Foods Inc. (NYSE:KFT) is reportedly in talks to arrange about $8 billion of financing for its bid to buy Cadbury (NYSE:CBY). According to two individuals with information on the matter, Citigroup (NYSE:C) and Deutsche Bank (NYSE:DB) are working to set up debt financing to cover about half of the $16.7 billion offer to buy Cadbury. Included in the financing would be a bridge loan, which would be repaid with the proceeds of an investment-grade bond offering. Bank officials declined to comment. Kraft may have to bid higher in order to woo Cadbury after the company rejected Kraft's initial bid. A senior analyst at Moody's Investors Service, Brian Weddington, said, "Any follow-up offer by Kraft would likely involve a high price. The increased leverage that would result under the proposed transaction would be considerable."

Write to Chip Brian at cbrian@tradethetrend.com

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