Cadbury rejects Kraft’s ‘derisory’ hostile takeover bid

By The Editor
Nov 9, 2009

Cadbury has rejected a hostile £9.8billion bid for the company from US food giant Kraft, branding the offer as “derisory”.

The widely expected bid followed a £10.2bn bid in September, which the head of Kraft Foods Irene Rosenfeld said would save the Somerdale plant near Bristol.

This bid was rejected at the time and the second-largest food company has now changed tack by approaching shareholders directly.

Shares in Cadbury have fallen since the initial bid, leading to the lower price offered now – equating to an individual share price of £7.17.

Share prices in Cadbury rose this afternoon to £7.60, leading analysts to think that an increased offer could be on the cards from Kraft or, potentially, a new bidder.

Roger Carr, the chairman of Cadbury, 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.

“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.”

Mr Carr added that the offer did not come remotely close to reflecting the true value of the company.

Cadbury have been adamant that they would close their factory in Keynsham, near Bristol. A public outcry in the town followed the announcement in 2007 that the factory — which had stood for more than 100 years — was to be closed and production of brands such as Double Decker, Crunchie and Fry’s Turkish Delight would switch to Poland.

Kraft, which makes UK brands Kenco, Dairylea and Philadelphia, said in September it was “eager to build upon Cadbury’s iconic brands and strong British heritage through increased investment and innovation”.

Kraft had until 5pm today to make a bid for Cadbury after the UK Takeover Panel issued a “put up or shut up” deadline.