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article imageCadbury Steps Up Defense Against Kraft Bid

By Owen Weldon     Jan 12, 2010 in Business
On Tuesday Kraft made a "hostile" bid to buy Cadbury PLC but Cadbury once again rejected the offer that was made by Kraft Foods Inc..
Cadbury has again turned down a takeover bid made by Kraft. Cadbury described the bid as hostile and told its shareholders that Kraft needs to be stopped from stealing the company with its offer.
Chairman Roger Carr said that the company's 2009 performance is exceeding expectations and that they are already building up some good momentum this year
In 2009 the company's sales were up 5 percent and the company says that in 2010 they will try to stay within 5-7 percent. Cadbury has new product as well as great investment in marketing, so staying within 5-7 percent is possible.
Cadbury has a few long-term targets that it would like to meet such as growing sales by 5-7 percent over the next four years as well as increasing margins to 16-18 percent by 2013.
Last week Kraft once again extended the deadline for shareholders of Cadbury and is giving them until Feb. 2 to accept its takeover bid. Kraft has also pledged that they will raise the cash elements of its shares-and-cash bid. Kraft will need to make an offer of $12.89 a share if they want to succeed, according to analysts.
The current offer is standing at 300 pence in cash and 0.2589 Kraft shares for each Cadbury share which was valued at 745 pence per share. Cadbury shares kept trading higher than the offer price, up until last week. Cadubry's shares have gone downhill withing the last week and its shares slipped within cents of the offer price.
Chairman Roger Carr said that the value of Cadbury has gone up since Kraft has made its approach back in September of 2009.
The share element makes the offer very unattractive and said that Kraft has a long history of under performance and has missed many targets. For those reasons Carr is concern about Cadbury's shareholders.
As of now Kraft is the only one bidding while companies Hersey Co. and Ferrero say that they are going through their options. Ferrero says that they might get ready to make a possible bid if they can obtain financing.
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