Confectionery maker Cadbury, the British brand home to Dairy Milk chocolate and Trident chewing gum, has refused a takeover bid by US food giant Kraft Foods, which offered €11.7 billion for the company.
AFP - US giant Kraft Foods on Monday launched a 10.2 billion pound (16.7 billion dollar, 11.7 billion euro) takeover bid for Cadbury but the British confectionery maker has rejected the offer, Kraft Foods said.
A tie-up would merge leading Kraft brands Oreo biscuits and Maxwell House coffee with Cadbury's Dairy Milk chocolate and Trident chewing gum.
Shares in Cadbury shot up 34.51 percent immediately after the announcement.
"Kraft Foods Inc. today announces that it has made a proposal to the Board of Cadbury plc to combine the two companies. The Board of Cadbury has rejected this proposal," said a statement issued by Kraft to the London Stock Exchange.
The offer "values the entire issued share capital of Cadbury at 10.2 billion pounds," it added.
Kraft Foods said it had proposed 300 pence in cash and 0.2589 new Kraft Foods shares per Cadbury share.
This valued each Cadbury share at 745 pence, 31 percent higher than Cadbury's closing share price last Friday.
"This proposed combination is about growth," Kraft Foods chairman and chief executive Irene B. Rosenfeld said in the statement.
"We are eager to build upon Cadbury's iconic brands and strong British heritage through increased investment and innovation."
She added: "We hope to engage with the Board of Cadbury on a constructive basis with the goal of consummating a recommended transaction."
Kraft Foods said a tie-up would lift its revenues to about 50 billion dollars a year from 42 billion dollars presently.
Date created : 2009-09-07