Kraft's repeat Cadbury bid snubbed
- Source: Global Times
- [01:01 November 10 2009]
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Kraft Foods turned hostile in its bid for Cadbury Monday, making a formal but unchanged takeover offer which now triggers a bid battle for the confectioner which could last up to three months.
The North American food giant Kraft effectively rubber-stamped the terms of its original approach which Cadbury had rejected two months ago.
Kraft is offering Cadbury shareholders 300 pence in cash and 0.2589 new Kraft shares for each Cadbury share, unchanged from the September offer.
However changes to currency and stock market values since then means the new bid is worth 9.8 billion pounds ($16.4 billion), less than the original offer of 10.2 billion pounds.
"It's no surprise Kraft came back with a formal bid. There is a view that Kraft should have played a longer ball game. No white knight was found and there were no counter bidders so there was no reason for Kraft to increase their offer," Clive Black, head of research at Shore Capital, told Reuters.
Kraft's chief executive Irene Rosenfeld has reiterated her group would not overpay for Cadbury, while the British group's chief executive Todd Stitzer has said a linkup with Kraft made no strategic sense and the group has a strong future as an independent candy maker.
"We remain convinced of the strategic merits for both companies of combining Kraft and Cadbury," said Rosenfeld in a formal offer statement.
Cadbury's board meeting immediately after the formal bid gave a response, which was also unchanged from that of September.
"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," said Cadbury chairman Roger Carr in a company statement.
