Kraft CEO Irene Rosenfeld has repeatedly insisted that she will not overpay for Cadbury, while Cadbury's CEO Todd Stitzer has said a linkup with Kraft [image-nocss] made no strategic sense and it has a strong future as an independent candy maker.
"We remain convinced of the strategic merits for both companies of combining Kraft and Cadbury," Rosenfeld said in the formal offer statement.
"Kraft's offer does not come remotely close to reflecting the true value of our company, and involves the unattractive prospect of the absorption of Cadbury into a low-growth conglomerate business model," Carr said.
The formal bid values Cadbury shares at 713 p a share or 9.8 billion pounds ($16.44 billion), compared with 745 p a share, or 10.2 billion pounds, at the time of Kraft's approach in September.
"It's all a bit of an anticlimax...I think something closer to 9 poundsnot scraping over 8 poundswill have us scrambling for our calculators," one top-25 Cadbury investor told Reuters.
"The process will be drawn out, and they will come back with a higher offer, although not as high as some are speculating about," analyst Clive Black at Shore Capital told the news agency.
Kraft is offering Cadbury shareholders 300p in cash and 0.2589 new Kraft shares for each Cadbury share, unchanged from the September offer. Kraft's move now gives it 28 days to post its official offer document to Cadbury shareholders, which will then trigger the 60-day bid timetable under UK takeover rules.
"There's a good chance they [Kraft] will have to increase this a little bit. I still think the cash side is likely where they have the opportunity to make it more attractive to Cadbury shareholders," Matt Arnold at Edward Jones told Reuters.
The bid for the maker of Dairy Milk chocolate and Trident gum from the Oreo cookie and Velveeta cheese group was expected after the UK Takeover Panel had ruled that Kraft had to make a formal bid by noon EST Monday or walk away for six months.
Cadbury is the world's second-largest confectionery group, while Kraft is No. 5, with brands such as Toblerone, Cote D'Or, Terry's and Suchard.
"If you bolt Cadbury onto a very slow-growing Kraft business, the overall returns over the long term or even the medium to long term are going to be lower than just having shares in the faster growing Cadbury bit," said the top 25 shareholder.
Click herefor Northfield, Ill.-based Kraft's webpage on the offer.
(Andclick here for previous CSP Daily News coverage of Kraft's quest for Cadbury.)
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