Cadbury rejected as "derisory" a bid that Kraft Foods launched on Nov. 9. The hostile takeover price is 9.8 billion pounds. 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 pounds (US$ 16.4 billion), less than the original offer of 10.2 billion pounds.
"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. "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."
Kraft CEO Irene Rosenfeld said in her company's bid statement that the U.S. giant was "convinced of the strategic merits for both companies of combining Kraft Foods and Cadbury." She 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."
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 defense 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.
Copyright Agence France-Presse, 2009
