Following the latest Takeover News

Following the latest takeover news, Richard Burden MP (Northfield), 
Lynne Jones MP (Selly Oak);Gisela Stuart MP (Edgbaston) and I have released 
this joint statement:

"To us, all the arguments about the importance of keeping Cadbury's 
independent as a successful and profitable British company remain as 
valid today as they were last month."

"We think a takeover by Kraft could pose real dangers for jobs,
innovation and the skill base in the West Midlands. We worry about
the kind of future that Cadbury's would have as part of this giant
multinational whose corporate priorities are decided a long way
away from the West Midlands and from those other areas of which
Cadbury's has long been a part."

"If the Cadbury's board do indeed recommend acceptance of the
Kraft offer, a big responsibility will fall on the shoulders of
Cadbury's shareholders when they come to make a decision."

"The future of a company so important to the industrial base of this
region and the UK should be about more than short term profit -
whether for hedge funds or for anyone else. We hope shareholders
will think carefully about that when they come to make a decision."

"Whatever the final decision of shareholders, the protection of jobs
and the long term future of Cadbury's will remain our priority in
the weeks and months ahead."

"We think what has been happening to Cadbury's also illustrates
the vulnerability of UK companies to hostile or predatory takeovers.
This is something which both Parliament and Government needs to
address."

Cadbury are a fantastic company. I've had a long and happy association with them during my years as a Birmingham MP. They have a good training record, a wonderful apprenticeship scheme and a fantastic record on corporate responsibility. I want Cadbury to remain independent and remain the kind of company we all admire and I want to see the jobs and production at Bournville secure for the future.

Like many people I'm worried about the situation with Kraft. There can be no doubt that this is a hostile bid and that Kraft are already a company with large debts. If they borrow more to buy Cadbury there is a very high risk that the extra borrowing could ultimately lead to cuts, jobs losses and a switch of production away from Bournville. The Directors are quite right to recommend to shareholders that they reject the Kraft bid which substantially undervalues Cadbury. The key here is the shareholders. It's important to remember that Cadbury is a Public Limited Company (Cadbury PLC) that means it's owned by the shareholders. People who describe it as a private company are talking nonsense. Not only is it owned by shareholders but many of those shareholders are USA based institutions. The reason Kraft wants to buy Cadbury is because it's a highly successful, profitable company which has made massive strides in modernising, re-tooling and developing new overseas markets. Kraft is a conglomerate that expands by buying up other businesses. There is no connection between Cadbury and the closure of loss making car plants. Cadbury is a huge success story, that's why Kraft would like to acquire it.

As soon as news of a hostile takeover surfaced I arranged to meet Cadbury Management to discuss what might happen. I then contacted the Department for Business Innovation and Skills (BIS) to talk through my concerns. I'm in regular contact with the company and Trade Unions. I met representatives of the company again in November and on 15 December I attended and addressed the launch of the Unite 'Keep Cadbury Independent' Campaign in Bournville. Later that day I again met representatives of the company in London to discuss the campaign, responses to Kraft and a planned meeting with Secretary of State Lord Mandelson.

On 16th December many MPs met with workers and trade unionists from Cadbury to discuss how we might help them in their campaign to protect the company and their jobs. Later that day Lynne Jones, Richard Burden and I met with Peter Mandelson. We were later joined by members of Unite. We discussed the general problem of hostile takeovers; whether or not there needs to be legislative change to make it more difficult for companies to engage in large scale borrowing to finance a takeover and then load the acquired asset with debt. The Secretary of State agreed that he is also concerned about this; we discussed the problems of hedge funds and temporary shares purchases which inflate the share price during takeover speculation but may ultimately be bad for the business; and the role of RBS, as a bank in which the taxpayer has a substantial stake, in helping to fund such a takeover.

I remain wholly committed to the Cadbury cause and will again be meeting representatives of the company on the 12 January to discuss what else we can do. The crucial dates are now the 19^th January when Kraft has to disclose if they will improve their offer and 2^nd Feb when we will know the shareholder's decision.

I believe that Cadbury should remain independent but I recognise that in a corporate world the only way the government could prevent a takeover would be to nationalise the company and I don't think that is a realistic aim. My job now is to do all that I can to secure the long term future of jobs and production at Bournville and to ensure that the ethos of the company, particularly with regard to training, staff opportunities and corporate development is not lost.