The deal was not taken well true....The large volume on the day is a good indication of how the market views this deal. I agree that it is strategically important for Cadbury, and possibly the right move in the LONG term, but right now the market will focus on earnings, and this deal is not expected to be earnings enhancing until 2005.
What we have here (IMO) is a rerating of the shares...The current dividend at 2.8% is not very inspiring, although I would conceed that this is a fairly "safe" business, and the dividend is not under threat.
However, this is not a fast growing business, and now with the debt being downgraded, I can't see any justification for a higher share price until the acquisition has proved itself as earnings enhancing, and the management succession is a success.
For my money I am betting on a rally back upto 400p on light volumes, and a subsequent fall to at least 350p
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