Former Cadbury Chairman Carr Feels UK Acquisition Threshold Should be Raised

While speaking at the Said Business School in Oxford last night, former Chairman of Cadbury, Roger Carr, after the success of Kraft's hostile acquisition bid for the British company last month, stressed that it is high time to look at "whether the current rules are fair and helpful to the long-term success of Britain's business future".

In his speech, Mr. Carr mainly identified three areas where changes can be employed - pulling back the level of shareholding at which purchasing or selling of either shares or derivatives must be disclosed from 1% to 0.5%, hiking the acceptance level for acquisitions above 50% of shareholders to make it more difficult for short-term shareholders to kneel down to the wishes of long-term investors, and taking away the voting rights from shares purchased during the bid period, so that "short-term money does not determine long-term futures".

During the 19 long weeks that Kraft was launching bids for Cadbury, about a third of the British firm's shares were sold by long-term holders, and the eight biggest purchasers were either hedge funds or short-term funds.

"In the final analysis of the deal, it was the shift in the shareholder register that lost the battle for Cadbury", said Mr. Carr, who is still the chairman of Centrica.