Kraft rejects Cadbury’s defence document

Kraft Foods has rejected Cadbury’s defence document against the £10.1bn takeover plan claiming Cadbury’s shareholders would be “taking a risk” if they support Cadbury as a standalone company.

Yesterday. Cadbury 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 response, Kraft published a statement arguing its proposed takeover of Cadbury would deliver cost savings and deliver “substantially more value”.

The statement says: “Cadbury is asking its shareholders to put their faith in… a set of long-term targets never before achieved by Cadbury and subject to significant risk and uncertainty. Our offer provides certainty and potential to shareholders.”

It was revealed yesterday that Ferrero and Hershey have both expressed interest in a bid for Cadbury, but have yet to submit either independent or joint bids. Hershey was believed to be raising finance to launch a £10.3bn offer with Ferrero.

Despite this, Kraft’s chairman and chief executive, Irene B Rosenfeld, says: “The company would continue to maintain a disciplined approach with respect to the acquisition of Cadbury.”

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.

Cadbury’s UK share price had fallen following the defence document publication at the time of going to press. Its US share price was up.

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