by Sarah Hills FoodBizDaily.com London
December 14 2009 - Kraft is trying to buy the Cadbury “on the cheap”, according to the chairman of the British confectioner, Roger Carr, as its board again recommended that shareholders reject the US food giant’s offer.
The Cadbury board has now published its shareholder circular in response to the formal offer posted by Kraft Foods earlier this month, saying it “unanimously rejects Kraft’s wholly inadequate offer as it substantially undervalues Cadbury”.
The offer values each Cadbury share at 713 pence and values the entire issued and to-be-issued share capital of Cadbury at approximately £10.1 billion.
In the same statement, Carr said: "Cadbury is an exceptional business worth much more than the offer put forward by Kraft. 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.
"Kraft is trying to buy Cadbury on the cheap to provide much needed growth to their unattractive low-growth conglomerate business model. Don’t let Kraft steal your company with its derisory offer."
Carr added that Cadbury will have delivered average revenue growth of 6% per annum and improved margins by 350bps for 2007-09.
He said: "We believe our shareholders should have the opportunity to reap the full rewards of the investment that has already been made in creating a platform for future improved revenue growth, enhanced profitability and high cash returns.”
The board, which believes that maximising shareholder value is best achieved through an independent Cadbury, stated that Kraft’s offer failed to recognise the value of Cadbury’s performance and the benefits of completing its Vision into Action plan, set out in June 2007.
Following a mid-term review of the plan, Cadbury also today outlined its upgraded targets for the next four years including organic revenue growth of 5-7% per annum and improved margins of 16-18% by 2013.
It also provided an update on current trading and guidance for 2009, highlighting continued growth in Chocolate, further improvements in Gum and excellent growth in Candy.
Its emerging markets, led by India, Middle East and Africa and South America “continue to show strong momentum” and it saw “robust growth” in the UK and “strengthening growth” in the US.
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Cadbury plc
Address: 25 Berkeley Square London, ENG W1J 6HB United Kingdom
Telephone: +44-20-74091313
Fax: +44-20-78305200
About Cadbury plc
Cadbury plc, formerly Cadbury Schweppes plc is a confectionery company. The Company is engaged in the confectionery business, with participation across the three categories of chocolate, gum and candy. The Company’s seven business units are Britain and Ireland, Middle East and Africa, North America, South America, Europe, Asia, and Pacific. Cadbury plc has developed a global portfolio of brands. The Company’s brands in chocolate are Cadbury Dairy Milk, Creme Egg, Flake, and Green & Black’s. Trident is the Company’s gum brand. Other gum brands include Hollywood, Stimorol, Dentyne, Clorets and Bubbaloo. Halls is a candy brand of the Company. Other brands are Maynards, The Natural Confectionery Co. and Cadbury Eclairs. On May 7, 2008, it completed the demerger of the Americas Beverages business, which became Dr Pepper Snapple Group, Inc. (DPS) following the demerger