Special Report of Kraft and Cadbury

exceptional Report Dexia AM Risk Arbitrage Process February 2010 A Focus on the kraft paper / Cadbury deal TRANSACTION HISTORY kraft paper approach September 7th - kraft paper approached Cadbury Possible hostile gallop at 745p per divide: 300p cash + 0.2589 KFT Cadburys board spurned proposal November 9th - Put up or shut up deadline kraft paper Formal Offer November 9th - Formal say on the sign same terms December 14th - Cadbury published defence mechanism document January 2nd - Press rumor: Ferrero, Hersey or hole-and-corner(a) Equity fund could bid Speculation that Nestlé could be a white knight Potential counter bidders: Hershey January 8th kraft sells Pizza Business to Nestle for 3.2bn USD Nestlé said they wint bid for Cadbury Warren Buffet criticized excess use of Krafts shares in Cadbury deal. January 18th Last day for Kraft to revise offer (in the absence of a counter bid) Kraft Revised Offer January 19th - Kraft increasing bid for Cadbury to 850p per share New deal terms are: 500p + 0.

1874 KFT + 10p special Dividend Cadburys board has recommended the improved offer January 25th Ferrero and Hersey said they wont bid for Cadbury February 2nd Kraft offer is state unconditional OUR RECOMMENDATION Set up the happen arbitrage spread at -6% flat Recommended position size 2% for DRA and 4% for DLSRA suit with diversification of portfolio: high prime(a) deal (top players and high quality assets) judge return 6% flat / 15% annualized ©Dexia asset Management - Editorial Date: 02 Mar. 10 - See judicial notice at the end of the document Page 1 / 3 Special Report Dexia AM Risk Arbitrage Process February 2010 TRADING Two engines of executing: Merger arbitrage spread and opportunistic vocation Opportunistic trading: buy @ average charge 786p Set up risk arb spread @ -6%: offer @ 725p versus 770 share price Expected return>10% flat Opportunistic trading: sell @ average price 812p Final offer price: 850p, closing February 2010 Set up risk arb spread @ 3% flat: offer @... If you want to get a full essay, order it on our website: Orderessay

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