Cadbury shareholders, don’t mess with a winning recipe
11th December 2009
Unite urges shareholders to reject Kraft
bid
The future of a great UK company hangs in the balance unless
Cadbury shareholders see off the hostile bid from Kraft, Unite the
union warned today (Friday).
So concerned by the Kraft bid is Unite that the union is
contacting the chocolate makers' shareholders directly to urge them
to reject the offer while also pursuing the UK Government and the
EU regulators for their assistance in blocking the bid.
In its Defence of Cadbury document being circulated to all
Cadbury shareholders, Unite warns that a Kraft takeover would
jeopardise Cadbury's status as a UK-based company. The union also
raises its concerns that a bid from the transnational, made
possible through massive borrowing, would destabilise Cadbury, an
otherwise secure company and a UK success story, and hit future
returns to shareholders.
Pointing to Kraft's recent takeovers’ record, Unite reminds
shareholders that Kraft has not delivered the promised returns.
Kraft's share price has fallen consistently as its product
portfolio expands, and customer confidence has also been hit
through a series of high profile product recalls. Leading credit
agency Standard & Poor’s has also downgraded Kraft's corporate
credit rating from 'A' in 2007 to its current status of 'BBB', two
levels above junk bond status, reflecting its concerns that Kraft
is not managing its portfolio well.
Appealing to Cadbury shareholders to make their decision on more
than the share price, Jennie Formby, Unite national officer for the
food industry, said: "Cadbury has a great record of generating good
returns for shareholders and that success has also meant good,
secure work for thousands. We appeal to shareholders not to put
this at risk by entertaining this Kraft bid.
"This offer is not in the best interests of either shareholders
or the UK, and certainly not the employees. It would saddle the
company with excessive debt, compromise investment and certainly
mean instability with attacks on jobs, wages and conditions.
"Kraft would also take the control of profitable company out of
this country, with investment decisions about UK and Ireland plants
being made in far off boardrooms. Our message to Cadbury
shareholders is to stay true to the company and workforce that has
done you proud."
Unite is also warning that the ramifications of the Kraft bid
are so far-reaching for UK business generally that the UK
government and the EU regulatory authorities must get engaged. The
union wants action to end UK companies' reign as the easiest in the
world to take over and a full investigation into the role of
state-supported bank RBS, which is part-funding the hostile bid by
Kraft.
Unite’s assistant general secretary, Len McCluskey, added:
"Cadbury was and is not for sale, yet a predatory bid from Kraft
means it is now far more likely to change hands. Faceless hedge
funds and bankers may be rubbing their hands with glee at the
fabulous fees they will coin in from this takeover but the heavy
price for their speculation will be paid for by workers. This is
not on. The sooner we have action to bring the speculators to heel
and remind state-aided banks that their first duty is to this
country, then the safer UK plc will be."
Unite will launch its Keep Cadbury Independent campaign on
Tuesday, December 15th at Bournville.
ENDS
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