Owing to the bid's cash-and-shares mix, movements in Kraft's share price (or the exchange rate) alter the value of the deal. At one stage this week, the deal value fell to 825p per share, below the minimum value many forecasters believed Kraft would need to pay to seal the deal.
Shareholders taking the cash alternative offered by Kraft will receive just 799p for each of their shares. Kraft is encouraging shareholders to take the cash-and-stock option to reduce the debt leverage it needs to complete the buyout.
"Kraft had been struggling with its own share value right through the bidding period," said one analyst. "It was always difficult for it to up its price as a result. The risk was that it would increase the number of shares offered, but then the share price would fall back. By getting a deal together that was acceptable to the Cadbury board, it did successfully reduce the importance of this problem it's pretty much a done deal now, even if it will be less than 850p."
Another analyst said large investors already knew the 850p figure was subject to change and so would not be too concerned about the falling bid value. "The deal was not for 850p per Cadbury share, it was for 500p in cash and 0.1874 Kraft shares," said Investec's Martin Deboo. "Although a few small investors might have been uncertain, large shareholders know exactly what they're signing up to."