In an open letter to Kraft, Cadbury chairman Roger Carr (pictured) said Kraft had said nothing in the last week to persuade Cadbury to accept its bid of $12.42 a share. "Under your proposal, Cadbury would be absorbed into Kraft's low-growth, conglomerate business model, an unappealing prospect which contrasts [image-nocss] sharply with our strategy to be a pure-play confectionery company," he said in the letter. (Click here to read the full letter.)
Kraft launched its offer for London-based Cadbury on Monday, only to receive an immediate rejection from the maker of Dairy Milk chocolate and Trident gum. (Click here to view previous CSP Daily News coverage.)
Carr also criticized the structure of Kraft's bid. Under the proposal, Cadbury's shareholders would receive 300 pence a share as well as shares in Kraft"a company with a considerably less focused business mix and historically lower growth."
Analysts have said Kraft has made an offer worth far less than valuations in the sector in recent years, reported the Journal
"Your proposal fundamentally fails to reflect the current value of Cadbury as a standalone business, its growth prospects and the potential synergies of a combined entity," said Carr. He pointed to Cadbury's transformation in recent years into a pure-play confectioner with leading market positions in both developed markets and emerging economies.
"We understand the attraction of our business and fully appreciate the value and benefits it would offer to those looking for superior growth and exposure to our attractive product segments and markets," Carr said.
Northfield, Ill.-based Kraft declined to comment to the newspaper.
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