Market valuation of €24.4bn would make a take-private of Cadbury the largest buyout in UK history.
Cadbury Schweppes shares have climbed following speculation that the confectionery and beverages company is likely to receive a takeover bid from a private equity group.
Shares were up 5p at 532p at yesterday’s close and had risen a further 3% by 1.30pm BST today to 549p, giving Cadbury Schweppes a valuation of about £15.5bn (US$29bn). A private equity-backed takeover would make this the UK’s largest ever buyout. Some analysts, however, say that Cadbury might not be an attractive target, given its level of debt and is currently trading at 12 times 2006 Ebitda.
Cadbury, however, is no stranger to private equity. In April this year, it acquired the 53% of the Dr Pepper/Seven Up Bottling Group it did not already own
for US$353m from US private equity firm Carlyle Group. The previous November, Blackstone Group and Lion Capital purchased the European beverage division in a €1.85bn transaction, giving the buyout firms ownership of the Schweppes, Orangina, Oasis and TriNa brands.
Ken Hanna, chief financial officer at Cadbury Schweppes, joined the company in January 2004 from private equity firm Compass Partners, where he had been an operating partner for five years.