Cadbury describe Kraft takeover bid as derisory

November 10, 2009

Cadbury has rejected a takeover offer that it has described as derisory by American company Kraft Foods. Roger Carr, Cadbury chairman said that the offer was far too low and that it offered the unattractive prospect of giving the Cadbury brand over to a low growth conglomerate. The deal worth £9.8 billion will now be put to Cadbury shareholders. The deal would involve a mixture of Kraft shares and cash, much the same as was offered to Cadbury by Kraft in September. However because of the drop in Kraft Food shares the sum comes to significantly less than the £10.2 billion initially offered.

Irene Rosenfeld, Kraft’s chairman said that it was her company’s opinion that a takeover by Kraft offered the best long term proposals to both Cadbury and its shareholders when compared to all other options including the option of remaining an independent company.

After the Kraft offer Cadbury shares dipped slightly but made a speedy recovery. Kraft shares however have fallen by 32 cents. Many investors were surprised that Kraft had not upped their previous offer. Kraft now has sixty days in which to persuade shareholders that their offer is the best way ahead. However there is always the possibility that another company could enter the frame and make a bid for the chocolate giant.

If Kraft does manage to take over Cadbury it would mean that Bassett’s liquorice allsorts and Dairy Milk along with Dentyne gum and Green & Blacks would join up with Maxwell House, Toblerone and Oreo biscuits.

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Written by Ben Lloyd · Filed Under Business 

Comments

One Response to “Cadbury describe Kraft takeover bid as derisory”

  1. respak on November 10th, 2009 7:54 pm

    Do you really think Irene Rosenfeld is really interested in the long term growth of Cadbury? This low ball offer was put in because Krafts earnings are down while Cadburys are up. Why not go after another company that is looking to merge, Cadbury wants to remain independent . Ms. Rosenfeld should have walked away, but now this has become a power play for her, rather than the long term interest for Kraft. If I was a shareholder I’d be questioning her motivation.