Page last updated at 08:55 GMT, Sunday, 13 September 2009 09:55 UK

Cadbury spurns 'low growth' Kraft

Cadbury's produces some of the UK's best known chocolate bars
Cadbury's produces some of the UK's best known chocolate bars

UK confectioner Cadbury has said would-be suitor Kraft has a "low growth" business model, and that a tie-up between the firms is "unappealing".

Last week Cadbury rejected a £10.2bn approach from Kraft Foods, saying the approach "fundamentally undervalued" the Dairy Milk maker.

Now Cadbury chairman Roger Carr has sent an open letter to Kraft chief executive Irene Rosenfeld.

He said the Kraft proposal was "of uncertain value" for his shareholders.

The letter also says that under Kraft's offer, "Cadbury would be absorbed into Kraft's low growth, conglomerate business model, an unappealing prospect".

Share movement

Mr Carr said that it was in Cadbury's best interests to remain as a stand-alone confectioner.

Kraft's bid is worth 300p in cash and 0.2589 new Kraft shares for each Cadbury share, and originally valued Cadbury at 745p a share or £10.2bn ($17bn).

However, this had dropped to around 707p on Friday due to the weakness in Kraft shares and the dollar.

Cadbury's shares closed on Friday at 775-1/2p. Kraft shares have fallen by about 7% since it made its proposal.

As well as Dairy Milk, Cadbury also owns the Green & Black's chocolate brand and Halls lozenges, Trident and Dentyne gum brands, and liquorice allsorts maker Bassett's. It spun off its drinks division as a separate business last year.

Kraft's brands include Kenco and Maxwell House coffee, Oreo biscuits, Jacobs, Terry's Chocolate Orange and Toblerone as well as cheese products such as Philadelphia and Dairylea.

A Kraft spokesman said the company had no comment to make on Mr Carr's letter.



Print Sponsor


SEE ALSO
Cadbury snubs 10.2bn Kraft move
07 Sep 09 |  Business
Return of the deal?
07 Sep 09 |  Business
'Stay-at-home' UK boosts Cadbury
29 Jul 09 |  Business
Cadbury workers 'vote on strike'
17 Jul 09 |  Business

RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites



FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

BBC navigation

BBC © 2013 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific