Kraft continues to back offer
December 15, 2009
NORTHFIELD, ILL. — Kraft Foods Inc. said shareholders of Cadbury P.L.C. are being asked to choose between having the value certainty and upside potential of Kraft’s offer to acquire the company versus taking the risk of continuing to own Cadbury shares in the absence of any offer.
The statement comes after Cadbury called Kraft’s offer “derisory,” and told shareholders not to “let Kraft steal your company.”
“Cadbury is asking its shareholders to put their faith in possible future value creation based on a set of long-term targets never before achieved by Cadbury and subject to significant risk and uncertainty,” Kraft said in a statement. “Furthermore, Kraft Foods notes Cadbury has chosen to concentrate on long-term targets with very little information on its prospects for 2010.”
Kraft said its offer represents a substantial premium to the unaffected share price of Cadbury, the companies represent a uniquely complementary fit and that its combination with Cadbury will provide the potential for meaningful revenue synergies and significant cost savings that will deliver substantially more value than Cadbury could achieve on its own.
Kraft said it believes its current trading prospects are strong, but since the announcement of its possible offer for Cadbury in September, the company believes its share price performance has been adversely impacted by short-term deal-related factors that are expected to end when the outcome of the offer is clear.
Kraft also urged Cadbury shareholders to ask Cadbury how the company will deliver its new revenue growth targets, how the company will deliver its margin targets without further spending on restructuring, whether or not the company’s margin goals are achievable and what the company’s underlying cash flow is.
“We have heard nothing from Cadbury that surprises us,” said Irene Rosenfeld, chief executive officer, Kraft Foods. “Cadbury’s Defence Document only reinforces our belief that there is a compelling strategic and financial rationale to combining these two companies and that doing so would be in the best interest of both companies’ shareholders. Having said that, Kraft Foods will continue to maintain a disciplined approach with respect to the acquisition of Cadbury in line with the criteria outlined in our offer documentation.”