Edelman and BSMG want taste of Kraft's potential IPO windfall

CHICAGO: Edelman and BSMG's FRB are waiting to see who will share

the spoils of Kraft Foods' planned dollars 5 billion public offering. IR

and financial communications fees associated with the planned stock sale

could reach the mid-six-figure range, say IR professionals.

Edelman is Kraft's long-time corporate agency and BSMG does Kraft

product PR. BSMG is trying to leverage its connection to get its FRB

unit, the former Financial Relations Board, considered for the IR


Kraft and parent Philip Morris wouldn't comment on plans to hire IR

help, citing the quiet period associated with registration statement

filed for Kraft shares March 16. Philip Morris hasn't specified how many

Kraft Class A shares it plans to sell, but it will retain control of

Kraft after the sale. It estimated Kraft would raise up to dollars 5

billion through the sale.

Ted Pincus, CEO of FRB and a vice chairman of BSMG, declined to


Hollis Rafkin-Sax, Edelman's financial practice GM, said she could not

comment either, but added 'we've been their long-time agency of


I think we've had a very good relationship for something like 25


Companies involved in IPOs normally turn to firms they've worked with in

the past to handle IR, said Robert Ferris, EVP with Ruder Finn. 'In IR,

there's not as much shopping for firms as in PR. You're much more a

confidante,' he said.

Whomever gets the work, they'll have to deal with Philip Morris' many

vocal opponents. Activist group INFACT has been sponsoring a boycott of

Kraft products because of its ownership by a big tobacco company and

won't drop the boycott as long as Philip Morris retains control.

Kraft IR could use the current bear market to its advantage, positioning

itself as a long-established company with widely known products that

would appeal to investors looking for safe haven stocks in today's

volatile market.

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