Kraft Foods made a $16.7 billion bid for Cadbury PLC, which represents a 34% premium for the maker of Dairy Milk chocolate and Trident chewing gum. Cadbury quickly rejected the offer, saying in a statement that the proposal “fundamentally undervalues” the company and its prospects. Conagra Foods (CAG) +4.44% and H.J. Heinz (HNZ) +5.08% rallied along with other packaged foods companies following Kraft’s rejected bid.
High profile deals involving Disney, Proctor & Gamble, and eBay in recent weeks are a welcome sign to investors that the market is recovering and the worst of the downturn could be over.
Meanwhile, energy and materials shares benefited from rising gold, copper, and oil futures. Big gainers on the Approved List included Noble (NE) +3.41%, Transocean (RIG) +4.17%, Peabody Energy (BTU) +6.01%, and Arch Coal (ACI) +3.25%.
General Electric (GE) gained 4.4% after JPMorgan upgraded the shares to “overweight” from “neutral,” saying the stock may be the “last of the low-expectations plays.”
Quick Hits
- Missing Lehman Lesson of Shakeout Means Too Big Banks May Fail
- Anything-But-Treasuries Gains as Credit Rebounds After AIG Death in China
- Stocks Cheapest Since ’89 Show Why Analysts Say Economists Wrong on Growth
- Closely Watched Buffett Recalculating His Bets
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Peter J. Lazaroff, Investment Analyst
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