Cadbury takeover: 60 day battle begins as Kraft confirms bid

Dec 5 2009 by Jon Griffin, Birmingham Mail

US food giant Kraft has fired the starting gun on a 60-day takeover battle for Birmingham-based Cadbury.

Kraft’s hostile bid campaign was officially launched when the group posted details of its £10 billion cash and shares offer, ahead of a deadline on Monday.

The offer from Kraft – the company behind brands including Toblerone, Dairylea and Kenco coffee – values Cadbury at around 713p a share.

Kraft is now posting its offer out to Cadbury’s shareholders, including 50,000 private investors, and the chocolate giant has two weeks to respond in a defence document.

The first deadline for shareholder acceptances has been set at January 5, with the whole process subject to a 60-day timetable under Takeover Panel rules.

Irene Rosenfeld, chairman and chief executive of Kraft, said: “We remain confident that the unique combination of Kraft Foods and Cadbury would create a significant growth opportunity for both businesses.

“That’s why we believe this offer is in the best interest of both companies’ shareholders.”

But the takeover tussle may intensify if other groups that have been circling Cadbury formally enter the fray.

Confectioners Hershey and Ferrero have already said they were considering their options for Cadbury, but have yet to make a move.

Yesterday’s formal offer from Kraft may smoke out a counter bid from the firms, which could also join forces for a joint approach, according to speculation.

Cadbury’s defence is likely to reiterate its belief in strong prospects as a standalone company.

Roger Carr, chairman of Cadbury, has dismissed Kraft’s initial bid as “derisory” and not “remotely close” to the true value of the firm.