Cadbury attacks Kraft bid

UK confectionary group Cadbury has today rejected a takeover bid from Kraft Foods, accusing the US giant of trying to buy it ÔÇ£on the cheapÔÇØ.  Cadbury today officially began its defense against Northfield, Illinois-based KraftÔÇÖs $17 billion hostile bid, issuing a statement to shareholders that raised growth and profitability targets and promised enhanced shareholder returns.  The confectioner is promising organic revenue growth of five to seven percent and profit margins of 16 to 18 percent by 2013. It also said it was targeting double-digit growth in dividends starting from 2010. The company also confirmed it has spoken informally to other parties interested in acquiring Cadbury. It has been reported that one of these is the Pennsylvania-based confectionary company Hershey. A statement released by Cadbury today confirmed that it ÔÇ£unanimously rejects KraftÔÇÖs wholly inadequate offer as it substantially undervalues CadburyÔÇØ. It went on to say that CadburyÔÇÖs board is ÔÇ£committed to maximising shareholder value and believes that this is best achieved through the strong continuing performance of an independent CadburyÔÇØ.  Chairman Roger Carr said: "Cadbury is an exceptional business worth much more than the offer put forward by Kraft.  ÔÇ£It is clear to all that Cadbury is a particularly attractive asset in the sector with iconic brands, a sharp category focus and an enviable geographic footprint."  He concluded by saying: "Kraft is trying to buy Cadbury on the cheap to provide much needed growth to their unattractive low-growth conglomerate business model.  ÔÇ£DonÔÇÖt let Kraft steal your company with its derisory offer."  The statement laid out what it saw as CadburyÔÇÖs ÔÇ£exceptional growth opportunitiesÔÇØ which it said reflected the companyÔÇÖs ÔÇ£strong position as a unique pure-play confectionery business, with iconic brands and leading positions in the attractive confectionery marketÔÇØ.  The Cadbury board initially rejected Kraft's bid, valuing the company at nearly $17 billion, in November, calling the offer "derisory".  KraftÔÇÖs hostile cash and shares offer values CadburyÔÇÖs shares at about $11.75. Unless it increases its offer to more than $13.80 a share, Cadbury is thought unlikely to engage in detailed takeover talks.  Cadbury owns brands including Dairy Milk, Flake and Wispa, as well as Trident Gum and Hall's Sweets.  KraftÔÇÖs 61 brands include Oreo, Maxwell House and Milka.  *┬á┬á┬á┬á┬á┬á┬á *┬á┬á┬á┬á┬á┬á┬á *