Cadbury & T-Mobile Bids, Housebuilders Raise Cash

Monday, September 7, 2009
By SHP

Things are starting to happen again.

OK, there were rights issues and takeovers in the past year, but they were mostly emergency cash raisings to stop companies from going under, or shotgun marriages backed by Government in order to save jobs.

Having sold off their housing stock, the housebuilders are raising cash in order to fund land purchases.

Bovis Homes successfully carried out a placing of 12.1 million shares with institutional investors last week, raising £60m in the process, following Bellway who raised £44.8 million in August.

Rival Barratt Developments is rumoured to be pondering a cash call of up to £500m later this month, part of which will help to prop up its balance sheet. 

Takeover talk is also rife.

T-Mobile’s UK arm is said to be at the centre of a £3.5bn bidding war between Vodafone and O2’s Spanish owner Telefonica, although any deal is likely to be subjected to close scrutiny by the Competition Commission.

The big news this morning however, is the £10.2bn bid by Kraft for Cadbury.  Cadbury’s shares roared up by over one third on the news that the company had rejected the approach from the American food giant.

Cadbury’s shares closed at 568p on Friday, the bid is worth 745p a share, and Cadbury has risen as high as 780p this morning.

All of this corporate activity can be taken as a positive indicator that companies are gaining in confidence and looking to exploit opportunities for growth.

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