US giant Kraft Foods today launched a hostile £9.8 billion takeover bid for Cadbury, which the British confectioner rejected as 'derisory'.
The cash and stocks offer matches the terms of Kraft's original bid in September. However, changes to currency and stock market values since then means the new bid is worth £9.8 billion, less than the original offer of £10.2 billion.
'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,' Cadbury chairman Roger Carr said.
Kraft chairman and chief executive Irene Rosenfeld said in her company's bid statement that the US giant was 'convinced of the strategic merits for both companies of combining Kraft Foods and Cadbury.''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,' he added.
'We believe that our proposal offers the best immediate and long-term value for Cadbury's shareholders and for the company itself compared with any other option currently available, including Cadbury remaining independent,' she added.
The formal bid is worth 300 pence in cash and 0.2589 new Kraft Foods shares per Cadbury share.
Kraft had until this afternoon to launch a formal bid or walk away for six months under British takeover rules.
Kraft Foods is the world's second biggest snacks group after Nestle, while Cadbury - led by American chief executive Todd Stitzer - is the second largest confectionery company behind Mars.
A tie-up between Kraft and Cadbury would merge leading Kraft brands Oreo biscuits and Maxwell House coffee with Cadbury's Dairy Milk chocolate and Trident chewing gum.
Cadbury last month stepped up its defence against a takeover by Kraft by upgrading its full-year sales forecast after a third-quarter rise. In reaction to a 7% gain in third-quarter sales, Cadbury upgraded its 2009 revenue forecast to the middle of its 4-6% range from the previous lower-end forecast.
A stronger sales outlook makes a takeover of Cadbury less attractive to its shareholders, who are likely to judge that the company is profitable enough without being merged with a bigger company
No comments:
Post a Comment