Cadbury rejects £9.8bn takeover offer
Kraft has repeated its September bid to takeover Cadbury offering 300p in cash and 0.2589 new Kraft shares for each Cadbury share amounting to £9.8bn.
Although, because of the reduction in Kraft's share value since then, the total value of the bid has dropped from £10.2bn to £9.8bn. The original offer was rejected by Cadbury, insisting that it "fundamentally undervalued" the business. The new offer has been described as "derisory" and that they have "emphatically rejected" the approach.
Roger Carr, Cadbury Chairman, 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", adding, "Kraft's offer does not come remotely close to reflecting the true value of our company, and involves the unattractive prospect of the absorption of Cadbury into a low growth conglomerate business model."
Irene Rosenfeld, Chairman and CEO Kraft Foods, said: "We remain convinced of the strategic merits for both companies of combining Kraft Foods and Cadbury. 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."
