Cadbury Rejects Kraft's Hostile Offer

Today, Kraft Foods launched a $16.3 billion hostile takeover bid for Cadbury plc. Commenting on the offer, Irene Rosenfeld, chairman and CEO of Kraft Foods, says: "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."

The offer's cash price per share and exchange ratio are unchanged from Kraft's September announcement, however, due to the fall in the Kraft share price since then, the implied value for each Cadbury share is around 4 percent lower.

Cadbury, which rejected Kraft's $16.7 billion offer in September, has also rejected the new proposal. Roger Carr, Chairman of Cadbury, says: "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."

Kraft has 28 days to draft a proposal to Cadbury's shareholders and 60 days to round up a majority of shareholders to vote the deal through.