Standard Life: Kraft Needs To Pay Over 900P For Cadbury

Cadbury PLC (CBY) shareholder Standard Life Investments said Monday that Kraft Foods Inc. (KFT) would need to raise its bid for the U.K. confectioner to over 900 pence a share if it is to win over its long-term investors.

"If Kraft want to get Cadburys they need to pay a full price to get long-term shareholders...on their side and that price would have to be, in my view, above 900 pence a share," said David Cumming, head of U.K. equities at Standard Life Investments, on BBC's Radio 4.

"The price in the press I noticed at the weekend talking about 800 pence to 850 pence -that would not secure support from companies like ourselves," he added.

Weekend press reports suggested Kraft would raise its offer to 820 pence a share as early as Monday. It has until midnight Tuesday to raise its current offer--worth about 762 pence a share, or GBP10.5 billion.

While Standard Life holds less than 1% of Cadbury, it is still one of the company's largest U.K. shareholders, said Cumming

"Cadbury is quite a well run business and they've done a good job," he said.

"Kraft needs Cadbury to accelerate its growth into higher growth product categories like gum and chocolate but they also need to diversify into faster growing regions like South America and Asia and Cadburys have got a strong position there, so I do expect them to make a bid," he said.

He said the price could even go above 900 pence if U.S. confectioner Hershey Co.(HSY) were to launch a counterbid.

Hershey has until the end of this week to launch its own bid for the company.

-By Michael Carolan, Dow Jones Newswires; 44-20-7842-9278; michael.carolan@dowjones.com

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