CONFECTIONERY group Cadbury has branded as “derisory” a £9.8bn hostile takeover offer from US food giant 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 Kraft said it was not prepared 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.”
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 today.
Mr Carr said: “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, which makes Dairy Milk and other chocolate bars, 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, which also owns Oreos biscuits and Toblerone chocolate, tabled its offer in reaction to a 5pm “put up or shut up” deadline imposed by the City’s Takeover Panel.
It now has 28 days to send out its offer document to Cadbury shareholders.
The US firm said: “We believe that our proposal offers the best immediate and long-term value for Cadbury’s shareholders and for the company itself compared with any other option currently available, including Cadbury remaining independent.”
Kraft believes it makes a “unique fit” with Cadbury and can deliver annual cost savings of £373m by creating a “global powerhouse” of leading confectionery and snack brands.