UPDATE:Banks Financing Kraft's Cadbury Bid May Grow To 18-Source
2009年11月7日 - 4:57AM
Dow Jones News
The number of banks involved in the financing for Kraft Foods
Inc.'s (KFT) bid for Cadbury PLC (CBY) could expand to 18, a person
familiar with the matter said Friday.
The bridge loan is estimated to be GBP5 billion to GBP5.5
billion (about $9 billion), and is arranged by Citigroup Inc. (C),
Deutsche Bank AG (DB) and HSBC Holdings PLC (HBC). A further six
banks will join the leading trio, including BNP Paribas SA
(BNP.FR), Barclays Capital, Royal Bank of Scotland Group PLC (RBS)
and Credit Suisse (CS), according to several people familiar with
the matter. The leads are expected to cast the net even wider, one
of these people said, with Mizuho Securities, the investment
banking unit of Mizuho Financial Group (MFG), and Calyon, the
investment banking arm of French bank Credit Agricole SA (ACA.FR),
also likely to be among the banks playing a role.
It's unclear if all the new funds would go toward financing the
offer. Another person familiar with the matter indicated previously
that some of the money could be used to pay down existing debt or
go toward a revolving credit facility.
Corporate bonds would replace the bridge loan, with the banks
likely to sell the bonds in several different currencies, tapping
the dollar, euro and sterling markets. This would match any new
debt with the revenue bases of the merged entity, as well as with
the existing currency mix of both Cadbury and Kraft's capital
structures.
Under U.K. law, Kraft, of Northfield, Ill., must make a formal
offer for Cadbury by Monday or walk away for six months. In
September, Cadbury immediately rejected Kraft's cash and stock bid,
then valued at GBP10.2 billion ($16.9 billion).
While Kraft's decision to pursue Cadbury was met by stockholders
without enthusiasm, judging by Kraft's falling shares, banks have
been eager to extend funds. The relationship would lead to
lucrative business with the merged company, such as future loan
facilities, share sales, mergers and acquisitions and refinancing
mandates further down the line.
The cost of protecting senior bonds of Kraft and Cadbury has
remained in range over the past week. It costs $85,000 a year to
protect $10 million of Kraft bonds for five years, according to CMA
DataVision, and $61,000 for Cadbury. Kraft bonds were mixed in thin
trade, according to online trading platform MarketAxess.
Kraft shares were recently trading at $26.90, about a 4% drop
from before the bid was announced.
Kraft couldn't immediately be reached for comment. The banks
couldn't be immediately reached for comment.
-By Kate Haywood and Romy Varghese, Dow Jones Newswires;
212-416-2218; kate.haywood@dowjones.com
(Carol Dean in London and Anjali Cordeiro in New York also
contributed to this article.)
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