The huge chocolate maker Cadbury PLC today rejected a takeover bid from Kraft Foods Inc. Cadbury is the largest chocolate manufacturer in the UK and Kraft is one of the largest food (cheese, cookies etc) manufacturers in America. So it would have made a huge company but Cadbury rejected the offer.

What Was The Offer?

Kraft offered to buy Cadbury for £10.2 Billion ($16.7 Billion). But Cadbury stated that this would undervalue their company which have made a huge profit this year. In fact, just in the first half of the year their profits have tripled to £313 Million. This was partly due to them selling their partnership with the Schweppes beverage company.

Is This The End?

Well possibly not. Analysts are predicting another offer from Kraft and there is talk about an offer from another party – Nestle. So shares have risen accordingly in Cadbury as people are predicting the takeover.

Chimp’s Summary – When deals like this are announced they cause shares to rise so it’s probably not a good time to buy. Wait for news of what happens and if they drop, then it might be time to buy because often once takeover talk starts, it usually ends up happening some time soon.