Cadbury Kraft acquisition very likely with management ok

Update 2: A deal was announced today, the deal did go through, Kraft will acquire Cadbury for about USD $19.7-billion. Kraft will pay 500 pence cash, 840 pence per Cadbury share and the remaining funds will be paid to Cadbury investors with cash. The acquisition has generated the largest chocolate-maker in history. You’ll be able to find complete details on the Kraft investors relations website, but it’s not up just yet for now.

Update 1: We are being told that a counteroffer from Hershey is not expected and that an announcement confirming the acquisition is likely Tuesday morning.

The board of the 186-year-old British chocolatier, Cadbury, has announced they favor and agree to a hostile takeover by American food company Kraft based on a revised offer.

The deadline for Kraft to increase its acquisition price expires tonight at midnight and our source tells us that Kraft will offer just over USD $19-billion, a significantly higher amount from the previous $17-billion offer that started in 2009. Cadbury management previously rejected an USD $18-billion offer from Kraft.

Reports indicate Kraft CEO Irene Rosenfeld was engaged in meetings with top-level Cadbury executives late tonight discussing Kraft’s new offer.

 Various British government officials have stressed the importance of keeping Cadbury independent to preserve its rich history and culture. Additionally, there are fears Kraft would lay off thousands of British workers as a result of restructuring and merging operations to increase efficiency. Opponents of the hostile takeover such as British Business Secretary Peter Mandelson argue the institutional investors are short sighted and ineffectively looking at a short-term profit.

The acquisition comes as hedge funds and mutual funds such as Franklin Templeton Investments who purchased an influencing amount of outstanding shares confirmed they would accept an increased offer for a takeover, not specifically to Kraft.

American chocolate maker Hershey is likely to submit an offer before the deadline, which will likely send the price even higher, making the premium yet more attractive to existing investors.