Cadbury shares fall as it trades confectionary only

Source: Food and Drink Digital

Date :02/05/2008 11:22:50

Cadbury Plc today announced that shares in the company dipped on its first day of trading as a standalone confectionery group.

Shares in the firm opened at 622 pence, off Thursday’s close of 640 pence, but by 0820 GMT they had pared their losses to trade off 1.6 percent at 629-1/2p, with mixed views from brokers concerning its fortunes.

Demerger

Cadbury, previously Cadbury Schweppes, began trading on Friday as a confectioner only following the demerger of its drinks business. It is now a London-listed confectionary group, with brands including Dairy Milk chocolate, Trident gum and Hall cough drops.

The drinks arm of the business starts trading as Dr Pepper Snapple Group next Wednesday and faces competition in the face of larger Coca-Cola co and PepsiCo Inc.

Credit Suisse valued shares theoretically at 620 pence, while fellow broker Deutsche Bank estimated the shares would open around 630 pence.

In the demerger, shareholders with 100 Cadbury Schweppes shares receive 64 shares in Cadbury and 36 in ‘Cadbury Beverages’, which become twelve in Dr Pepper from May 7.

Following the $23 billion planned takeover of Wrigley Jr Co by Mars’ which was announced earlier this week, Cadbury is set to be knocked off the number one spot in world confectionary.

May 2, 2008