Cadbury describes Kraft bid as ‘unappealing’
Roger Carr, chairman of British confectionery giant Cadbury, described its US rival’s £10.2 billion takeover offer as an “unappealing” and “unattractive prospect”.
Last week, US food giant Kraft, which is renowned for brands such as Kenco coffee, Oreo biscuits, Terry’s Chocolate Orange and Toblerone, approached Cadbury with the unsolicited offer, which the maker of Dairy Milk chocolate, later rejected.
When news of the deal emerged last Monday, shares in Cadbury soared 35%. However, Kraft has lost around 7%, reducing the value of the deal.
Kraft said the takeover would secure UK jobs, while keeping open Cadbury’s Somerdale factory, which is currently scheduled to close.
Kraft also said the deal would invest in Cadbury’s plant in Bournville, Birmingham.
At the time, Kraft said Cadbury had “unequivocally” rejected the approach but said that Cadbury’s brands were “highly complementary” to its portfolio and “would benefit from Kraft Foods’ global scope and scale and array of proprietary technologies and processes”.
In a letter sent to Irene Rosenfeld, Kraft’s chairman and chief executive, Mr Carr dismissed the offer saying Kraft has a “low growth” business model, and a tie-up between the firms is “unappealing”.
The letter, which is set to be issued to the London Stock Exchange tomorrow, also said the deal was “of uncertain value” for Cadbury shareholders.
A spokesperson for Kraft said it had no comment to make on Mr Carr’s letter.
At the time of the offer, Kraft said a combination of the two firms would create a “global powerhouse” in food and confectionery, with annual sales of around US$50 billion (£30.5 billion).
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