Cadbury attacks Kraft

The Cadbury and Kraft Foods saga appears set to continue as a letter appears on the desk of Kraft chief exectuive Irene Rosenfeld from the chairman of Cadbury Roger Carr. In it he calls Kraft Foods a "low-growth" company.

The letter, which was made public on Saturday the 12 September, explained why Cadbury snuffed Kraft's recent GBP£10.2 billion takeover bid. In it Carr said a sale to Kraft was "an unappealing prospect", insisting the UK firm believed in its strategy to be an independent company focused completely on its confectionery.

"Your proposal is for Cadbury shareholders to exchange shares in a pure-play confectionery business for cash and shares in Kraft, a company with a considerably less focused business mix and historically lower growth," Carr wrote. Kraft had announced its proposed cash-and-share offer to Cadbury last Monday, but it was rejected by the chocolatier's management board.

But during the last week, Rosenfeld has stepped up the pressure on the Cadbury board, claiming that the company's potential to grow was "constrained" and that joining Kraft would allow the combined group to compete more effectively against the likes of Mars and Nestle.

Now though the letter has emerged days before Todd Stitzer, chief executive of Cadbury, will announce fresh details of Cadbury's takeover defence when he addresses investors at a Sanford C. Bernstein analyst conference in London this Wednesday.

Shares in Cadbury rose 5p to 780.6p today, above Kraft's cash and shares offer worth just under 706p per share.

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