Cadbury says Kraft bid is seeking to “buy on the cheap”

Cadbury has published its defence document against Kraft’s latest takeover bid, describing the £10.1bn offer as “derisory” and an attempt “to buy Cadbury on the cheap.”

In a circular to shareholders, the company reminds its investors that the company “is a business with exceptional growth opportunities” and has “built the leading position in emerging markets”.

The document comes ten days after Kraft Foods presented its new offer for Cadbury, valuing the UK confectioner at £10.1bn ($16.8bn). The offer was unchanged in share value. Hershey is also widely tipped to make an offer at some point this week.

Roger Carr, chairman of Cadbury, says “Cadbury is an exceptional business worth much more than the offer put forward by Kraft. 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.”

He adds: “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 company claims that Cadbury wll have delivered average revenue growth of 6% per annum, through its famous brands such as Dairy Milk and Wispa.

Kraft’s latest bid comes a month after Kraft last issued a £9.8bn hostile bid for Cadbury just a few hours before the imposed deadline. The board of the Dairy Milk maker, which described it as a “derisory” offer that undervalued the company, rejected the bid immediately.

Shareholders have until 5 January 2010 to respond to the offer.

Kraft says its offer is “in the best interest of both companies’ shareholders”.

Kraft initially launched a £10.2bn bid for Cadbury in September, which was also immediately rejected. Cadbury chairman Roger Carr has said the Kraft offer is an “unappealing prospect”.

More recently, it has been speculated that other confectionery giants are also looking to compete for the business. Hershey was believed to be raising finance to launch a £10.3bn offer with Ferrero for Cadbury and Nestle is also reportedly musing an offer.

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