Bloomberg reports today that Nestle has set a $9.6B share repurchase. Although less than the $28.1B it will receive from selling its Alcon stake, this event diminishes the likelihood of a bid for Cadbury that competes with Kraft's. Indeed, KFT is up 1% today as I write this. CBY is also up 1%, but if KFT were to win the auction, then CBY's stock moves would be correlated to KFT. Hence, the market believes KFT will win CBY.
CBY market cap is $70B. The $18B remaining after the Alcon sale isn't sufficient to cover the price of a CBY bid higher than KFT's.
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