Sweet firm sees takeover deadline
Cadbury’s American suitor was today issued with a “put up or shut up” deadline by the City takeover authority in the UK.
A Takeover Panel ruling instructed US giant Kraft Foods to announce its intentions to either make a firm offer or not to bid for Cadbury.
If Kraft does not make an offer by 5pm on November 9 it will then be bound not to make another attempt for at least six months.
Its target has already dismissed Kraft’s offer of offer of 745p a share - valuing the company at £10.2bn (€11.1bn) – and Cadbury’s shares are now trading at around 800p, leading to speculation that Kraft will up its offer.
The Dairy Milk firm today reiterated its stance that Kraft’s offer “made no strategic or financial sense for Cadbury and fundamentally undervalued the group and its prospects”.
Cadbury chairman Roger Carr said: “Cadbury has a strong position in the global confectionery market and the board is confident in Cadbury’s standalone pure play strategy and growth prospects.
“We have made our position on Kraft’s proposal very clear and we welcome the panel’s decision today in the interests of obtaining clarity and certainty for our shareholders and employees at the earliest opportunity.”
A spokesman for the US firm today said: “We have noted the decision and understand the implications.”
Kraft has said a tie-up with Cadbury, which is the world’s second biggest confectionery firm behind Mars, would create a “global powerhouse” with annual sales of around $50bn.
It also expressed a hope to keep open Cadbury’s Somerdale facility near Bristol - which is currently scheduled to close in early 2010 – while investing in the firm’s Bournville factory near Birmingham.
But Cadbury’s chairman Roger Carr has dismissed the “unappealing prospect” of Cadbury being absorbed into “Kraft’s low growth, conglomerate business model” in an open letter addressed to Kraft chief executive Irene Rosenfeld.
A Cadbury takeover would be the biggest in the UK sweets sector since Nestle bought Rowntree in 1988.
The firm, founded by Quaker John Cadbury in 1824, is also reported to have attracted the attentions of other global food rivals such as Hershey and Nestle.
