The opposing sides of the Kraft/Cadbury takeover battle shared a panel at the UK IR Society’s annual conference today for a discussion on how to handle hostile takeover bids.
In the Cadbury corner was John Dawson, the former head of IR at the British confectioner who now heads up IR at National Grid, as well as being chairman of the IR Society.
From the Kraft side was Charlie Lytle, managing director of banking and broking at Citigroup, which advised the US food company during what was eventually a successful takeover approach.
Not a hint of the bitterness that marked the takeover was evident during the panel discussion, however. Indeed, Dawson revealed during the talk that he and Lytle had visited hedge funds together as part of their preparation for the session.
Dawson did take the opportunity, though, to make a light dig at his fellow panelist’s expense, noting that Kraft’s tactic during the takeover – of bidding low and then dragging out the process – was quite ‘simple’.
‘Obviously you’ll get a different perspective from the advisors to Kraft,’ added Dawson, to which Lytle gave a wry smile.
Kraft, of course, ended up winning the battle, although they had to pay £2 bn ($3 bn) more for Cadbury than they wanted to, said Dawson, which for him shows the target company put in a good performance for its shareholders.
The ex-Cadbury man went on to offer advice to the audience of IROs about defending hostile takeovers. It’s key to create an investor communications plan, said Dawson, to make sure people know what they’re doing, ensure the message remains consistent and to help source feedback from the market.
‘You’ve got to get on top of the stakeholder relationship so they don’t have to listen to the media, they don’t have to listen to analysts, they don’t have to listen to tittle-tattle in the market,’ he said. ‘If they want to hear what’s happening, they’ll talk to you.’
The advice could prove timely. During his presentation, Lytle explained how global and UK M&A activity were currently trending back to pre-financial crisis levels.
[Article by Tim Human, IR magazine]