Don't miss

Replay


LATEST SHOWS

THE INTERVIEW

Turkish troops to go further into Syria, says foreign minister

Read more

EYE ON AFRICA

Court ruling expected on Gabon's contested election results

Read more

MEDIAWATCH

Clinton's Comedy Turn

Read more

THE WORLD THIS WEEK

Sarkozy's Populist Pivot, Bahamas Leaks, Syria Truce, Rome Olympic Bid (Part 2)

Read more

THE WORLD THIS WEEK

US Police Shootings: Race relations and the race to the White House (Part 1)

Read more

#TECH 24

Breaking the wall between technology and people

Read more

FRANCE IN FOCUS

Rural France: Challenges and opportunities

Read more

REPORTERS

Video: In Burma, ex-political prisoners struggle to return to normal life

Read more

ENCORE!

Xavier Dolan: Wunderkind of Québecquois cinema

Read more

Business

Cadbury rejects Kraft's 'derisory' takeover bid

Text by News Wires

Latest update : 2009-12-14

British confectionery group Cadbury has defended its decision to reject a takeover bid by US giant Kraft Foods, outlining a vision of a high-growth future as an independent company.

REUTERS - Britain's Cadbury Plc raised its long-term growth targets and reported upbeat trading as it dismissed a 10 billion pound ($16.5 billion) bid from Kraft Foods, kicking off a seven-week fight for its independence. 

The Dairy Milk chocolate maker on Monday called Kraft's bid wholly inadequate.

"Kraft is trying to buy Cadbury on the cheap to provide much needed growth to their unattractive low-growth conglomerate business model," Cadbury Chairman Roger Carr said in a statement. "Don't let Kraft steal your company with its derisory offer."

Highlighting the strength of its "standalone" strategy, Cadbury outlined a higher growth vision for an independent future as a fully focused confectionery group built around strong sales growth and a rise in profit margins.

"Our strong momentum continues, as our standalone confectionery strategy continues to exceed expectations with further good progress in October and November," said Chief Executive Todd Stitzer.

The group raised its underlying annual sales growth target to between 5 and 7 percent from its previous 4 to 6 percent range and saw operating margins by 2013 in a range of 16 to 18 percent after looking for good mid-teens margin by 2011.

It also looked to double-digit percentage rises in dividend payouts from 2010 onwards, and a higher rate of converting operating profits into cash flow also from 2010.

Kraft's hostile cash and shares offer is currently worth 727 pence, or 10 billion pounds, against Cadbury's closing share price on Friday of 790-1/2p, and most analysts believe Kraft will need to pay 820p to 850p to win.

Kraft has declined to raise its bid from the terms first announced on Sept. 7 with 300p in cash and the rest in new Kraft shares, determined not to overpay and to play the long game, convinced no rival bidder will emerge.

U.S.-based Hershey and Italy's Ferrero have said they are contemplating bidding for Cadbury, while Nestle is said by analysts to be watching events closely. The Sunday Telegraph has reported Cadbury and Hershey have held talks over a friendly bid by the U.S. firm..

 

Date created : 2009-12-14

  • FINANCE

    Hershey Trust backs $17 billion bid for Cadbury, says report

    Read more

COMMENT(S)