Cadbury Schweppes announces demerger timetable

Source: Stock Market Digital

Date :11/03/2008 11:52:55

Confectioner Cadbury Schweppes Plc has today said that the long-awaited demerger of its U.S. drinks company will happen in May.

After previously announcing the decision not to sell the drinks business, the credit crunch ruling out a number of private equity bids, the company has now set out a projected timetable for the demerger.

The company plans to bring forward its AGM to April 11 so shareholders have the opportunity to vote on the demerger. Assuming the shareholders give it the go-ahead, the drinks company will be demerged on May 7.

Conditions

The drinks business, renamed to Dr Pepper Snapple Group (DPSG), is set to be financed with $1.9 billion of new debt, which will be used to offset Cadbury Group’s existing debt. This credit will be provided by a consortium of banks, comprising JP Morgan Chase, Bank of America, Goldman Sachs, Morgan Stanley and UBS.

Cadbury has acknowledged that these credit agreements are subject to certain conditions, “many of which are expected to be satisfied by the date of the shareholder meeting on April 11.” One particular condition is that DPSG maintains its expected credit rating.

In the event of a successful demerger, existing shareholders will receive shares in both London-based Cadbury and the New York-based drinks company.

March 11, 2008