London afternoon: Cadbury melts as Nestle withdraws

The Footsie moved sideways over the lunch time session, with strength in financials and miners continuing to offset weakness among retailers.RBS adds to yesterday's stellar gains and is joined higher by fellow banks Barclays and Lloyds. The latter pair have been selected by Deutsche Bank as the best two recovery plays in the European banking sector.Broker comment also lifts the hedge fund manager Man Group. Nomura has a buy rating on Man, which it thinks offers a strong market position, balance sheet and yield.High street retailer Next is lower after it increased full-year profit forecasts again in response to better than expected sales in the run up to Christmas, but said it remains cautious on 2010. Profits for the year to 31 January will be between £490m and £500m, it says.Marks & Spencer, which updates the market on Christmas trading tomorrow, is also lower.Cadbury is lower after Swiss foods behemoth Nestle ruled itself out of the bid battle for the UK gum and chocolate maker. Nestle has still played its part in the fate of Cadbury, however, as it has agreed to buy the North American pizza business of Cadbury's predator Kraft Foods for $3.7bn, which has allowed the US company to beef up the cash element of its bid for Cadbury. It's the share element of Kraft's shares plus cash offer for Cadbury that is worrying Berkshire Hathaway, the investment vehicle of celebrated investor Warren Buffett. Berkshire Hathaway, which owns around 9.4% of Kraft's issued share capital, has urged shareholders to vote against a proposal to authorise the issuance of up to 370m Kraft shares to facilitate the proposed acquisition of Cadbury.The company said authorising the proposal would effectively give the Kraft board a blank cheque with which to increase its bid for Cadbury. "Kraft stock, at its current price of $27, is a very expensive 'currency' to be used in an acquisition," Buffett said in a statement Tuesday morning, adding that the board of Kraft had spent $3.6bn in 2007 buying back Kraft shares at $33 each, "presumably because the directors and management thought the shares to be worth more."Drugs firm GlaxoSmithKline is under the weather after France cancelled an order for 50m doses of H1N1 (swine flu) vaccine from Glaxo yesterday. Premier Oil has agreed with Serica Energy that it will farm-in to a 50% equity interest and assume operatorship of Block 22/19c in the UK Central North Sea. Block 22/19c contains the Oates and Bowers Palaeocene prospects.Balfour Beatty said Hong Kong-based infrastructure contractor Gammon Construction, in which the support services contracting firm has a 50% shareholding, has been awarded two new contracts valued at HK $2.27bn (£180m). Dublin based cement maker CRH expects full-year pre-tax profits to drop 55% and said trading conditions remain difficult.Construction and housebuilding group Galliford Try said it has been confirmed as a construction partner of the Equitix consortium, which has been appointed as the preferred bidder on the Cambridgeshire Building Schools for the Future (BSF) programme.Business is blooming at garden and horticultural products firm William Sinclair after a difficult 2008.Public sector outsourcing firm May Gurney has had its long term maintenance contract with South West Water renewed and extended.Agriculture and engineering firm Carr's Milling said it continues to expect an improved result for the full year, although trading in the first quarter was substantially below that for the strong first quarter of the previous year. Educational IT specialist RM Group has firmed up some of the details of its deal to provide on screen electronic marking services for the International Baccalaureate (IB) diploma qualification exams.Drug developer Ark Therapeutics said it is confident it has the necessary data to address concerns the European Committee for Medicinal Products for Human Use (CHMP) has over Ark's brain cancer treatment Cerepro. Shares in LSL Property are higher on news that 2009 results will be 'significantly' ahead of expectations, thanks to stronger than expected activity in the housing market in the second half.Solar power technology group Jetion Solar Holdings is enjoying a spell in the sun after it said net profit for 2009 will be well above market expectations of $11.7m.