Kraft makes hostile bid for Cadbury
November 9, 2009
by Allison Sebolt
NORTHFIELD, ILL. — Kraft Foods Inc. has made a hostile bid for Cadbury P.L.C. and kept the same terms as in its original bid that was previously rejected by the London-based confectionery company. Cadbury has once again rejected the offer.
“We remain convinced of the strategic merits for both companies of combining Kraft Foods and Cadbury,” said Irene Rosenfeld, chairman and chief executive officer. “We believe that our proposal offers the best immediate and long-term value for Cadbury’s stakeholders and for the company itself compared with any other option currently available, including Cadbury remaining independent.”
Kraft is offering Cadbury shareholders 300 pence in cash and 0.2589 new Kraft shares for each Cadbury share. Overall, this gives Cadbury a value of 713 pence per share and an entire issued shared capital of £9.8 billion ($16.5 billion), which compares with a value of 745 pence, or £10.2 billion, at the time of the original offer in September. The lower overall value of the offer is due to the lower value of Kraft shares.
“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 Roger Carr, Cadbury chairman. "As a result, 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.
“Cadbury is an exceptional standalone business. It has strong iconic brands, a sharp category focus and an enviable geographic scope. Our successful financial delivery and strong business model reinforce the board's belief in both the strategy and prospects of Cadbury as an independent company. "