“Cadbury shareholders stand to lose out massively”

“Cadbury shareholders stand to lose out massively” is the language a shareholder has used in suing Cadbury to reconsider the Kraft offer. More specifically, according to a Reuters story today:

“Cadbury shareholders stand to lose out massively if the Cadbury board continues to refuse to negotiate a transaction with Kraft,” the lawsuit said. “But Cadbury’s board stands to lose its lavish compensation and positions of power if Cadbury is sold.”

And there you have it. Either this shareholder reads TLRB or more likely came to the conclusion that I hypothesized: management has a lot to lose when the company gets sold, while shareholders have a lot to gain. The agency dilemma is alive and well. I for one have my popcorn and comfy chair ready to watch as the Kraft-Cadbury saga gets even more interesting (to me at least).

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October 1, 2009 - Posted by Brett | Uncategorized | Agency Dilemma, Cadbury, Kraft, Mergers

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About

Brett Spurr has been on and around Wall Street since the age of 19, nearly half a lifetime ago. He helped make investment decisions for a $15 billion mutual fund complex. While locking horns with CEOs was fun, he now runs a personal financial planning firm helping individuals navigate their financial lives. Brett is a CERTIFIED FINANCIAL PLANNER ™ certificant and investment manager by day and a full-time geek who delights in debating all things financial or economic.

Karl Mamer is host of The Conspiracy Skeptic podcast, a 12-part look at conspiracies of today and the not too distant past. Karl is also the world’s greatest living proponent of Franglais. He also likes to bait Nigerian Bank Scammers and hosted his own podcast about teaching English in Seoul, South Korea. Karl lives in Toronto, Canada and works as a senior technical writer to pay the bills.

Julio Guardado is a former tech CEO who after surviving a tech start-up during the dot com bust decided to join the dark side and become an investment banker. While wining and dining CEO’s (we call it “locking horns”) is great, he enjoys getting inside their heads and companies even more. Julio also runs RV Investor, a web site that specializes in the recreational vehicle industry. Julio lives in Silicon Valley.

Jon Blumenfeld has been on and around Wall Street since 1989, as a trader and researcher in interest rates and their associated financial products. Most recently he was an Interest Rate Strategist at Bear Stearns and Co., where he was named to Institutional Investor Magazine’s All-America Fixed Income Research team for Interest Rate Derivatives in 2007.

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