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Kraft's bid for Cadbury 'derisory'
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A £9.8 billion hostile takeover bid from US food giant Kraft has been labelled "derisory" by Dairy Milk maker Cadbury.
Kraft - the company behind brands including Dairylea and Kenco coffee - appealed directly to Cadbury's investors after its initial approach was rejected by the board in September.
But it refused to improve the terms of its cash-and-shares offer, which is now lower than two months ago due to falls in the Kraft share price.
Cadbury chairman Roger Carr said: "The board has emphatically rejected this derisory offer and has strengthened its resolve to ensure the true value of Cadbury is fully understood by all."
He added: "Kraft's offer does not come remotely close to reflecting the true value of our company."
Cadbury's board rejected the Oreos and Dairylea maker's initial approach in September but Kraft has taken its £9.8 billion offer directly to shareholders.
The US firm said it was "convinced" of the merits of a merger but failed to improve its cash-and-shares offer, which is now worth less to Cadbury's investors than two months ago due to recent falls in Kraft's share price.
Kraft disappointed with weak third-quarter results last week - downgrading revenue guidance and hitting its shares. This has sent the value of the firm's offer down from 745p in September to 717p on Monday. Mr Carr added: "The repetition of a proposal which is now of less value and lower than the current Cadbury share price does not make it any more attractive."
Cadbury will contact shareholders shortly with a defence document setting out why it should remain as a standalone business. Mr Carr added that a merger with Kraft represented the "unattractive prospect" of being absorbed into the US firm's "low growth conglomerate business model".
Kraft has said it will remain "financially disciplined" over its approach for Cadbury. Its largest shareholder is billionaire investor Warren Buffett, who has warned the company against overpaying for Cadbury.
