After what seems like an age, chocolate group Cadbury has finally spun off its drinks division and from today is trading as a standalone confectionery business.
To recap, investors are to receive 64 new Cadbury shares for every 100 held. They also get 12 shares in the newly named Dr Pepper Snapple beverages group. These shares begin trading in New York next Wednesday, although in when-issued form they currently stand at around $27.
The new Cadbury shares have fallen 6.47p to 633.5p this morning, albeit they are quoted without the 10.5p dividend. Credit Suisse analyst Alex Molloy reckons they are worth less than that and has set a target price of 585p.
He said: "In our view the shares are overvalued at this level. We can find few precedents for successful restructuring programs.
"While Cadbury may be part of any future confectionery consolidation, we don't see it as a takeover target. Wrigley and Mars have taken themselves out of the equation, Nestlé and Cadbury would have anti-trust issues, while Hershey is too small to swallow Cadbury, in our view. Kraft is probably large enough but confectionery only makes up about 10% of revenues."
Overall the market is trying to end the week on a bright note, after barely moving all week. The FTSE 100 is currently 50.7 points higher at 6138.0, although non-farm payroll numbers from the US due this afternoon could well change the mood.
Retailers have regained some ground ahead of the Bank Holiday weekend, on hopes that the populace will decide to open their wallets again. Next is up around 7% and Marks & Spencer 5%. Galliform, the kitchen maker which issued an upbeat trading statement yesterday, has added another 6.75p to 80.25p.
