Cadbury defends decision

Cadbury rejects Kraft

Cadbury has defended its decision to reject a hostile takeover bid from Kraft Foods, citing that Kraft's "derisory" bid was an attempt to "buy Cadbury on the cheap."

The Cadbury board first rejected Kraft's GBP£10 billion bid in November, and is now in talks with US rival Hershey about an alternative takeover deal, the BBC report.

Shareholders have until 5 January 2010 to respond to the offer, which Kraft says is in the "best interests" of both companies.

The offer values Cadbury at 718p per share - below the current share price of 787p per share.

Roger Carr

In the statement aimed at shareholders, Cadbury chairman Roger Carr stressed the value of the Cadbury brand and products.

"Cadbury is an exceptional business worth much more than the offer put forward by Kraft," he said.

"It is clear to all that Cadbury is a particularly attractive asset in the sector with iconic brands, a sharp category focus and an enviable geographic footprint.

"Kraft is trying to buy Cadbury on the cheap to provide much needed growth to their unattractive low-growth conglomerate business model. Don't let Kraft steal your company with its derisory offer."

The future

Cadbury chief executive Todd Stitzer said Cadbury's performance in recent months was continuing to "exceed expectations", demonstrating that Cadbury's strategy of remaining as a standalone company was working.

The company also said it expected revenue growth of between five percent and seven percent over the coming years, with operating margins of between 16 percent and 18 percent by 2013.

Stitzer made no reference to Hershey making a possible bid to rival Kraft's offer.

Hershey, which already makes some Cadbury products under licence in the US, is believed to be interested in tabling a higher offer in a move welcomed by the Cadbury board.

A Kraft-Cadbury deal would create the world's biggest confectionery group overtaking Mars-Wrigley bringing Cadbury's chocolate and Trident gum together with Kraft's brands Milka, Toblerone, Cote D'Or, Terry's and Suchard chocolate brands.

Related News:

Cadbury vs Kraft |Hershey and Ferrero join forces for Cadbury |Cadbury attacks Kraft |Is Kraft set to make a new bid?

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