Cadbury will aim to paint a defensive Q3 picture

CADBURY, currently under siege from a bid by Kraft, will look to paint a picture of growth at this week&rsquo;s update and try and see off the predator by highlighting its sales, volumes and margin trends.<br /><br />The world&rsquo;s second largest confectionery group is due to issue a third quarter update on Wednesday after rejecting a &pound;10.2bn bid proposal in early September. The Takeover Panel has given Kraft until 9 November to come up with a firm bid.<br /><br />Cadbury is not expected to say anything new on the bid in its update but will look to bolster its defences with an upbeat trading statement. But analysts say it may have limited room and may only be able to reiterate its 2009 sales and margin targets.<br /><br />Many analysts believe Kraft will wait until after its own third quarter results on 3 November before increasing its bid, with most saying it will have to offer 850p to 900p to win Cadbury board approval and avoid having to make a hostile bid.<br /><br />&ldquo;We strongly believe that Cadbury shareholders should reject any offer below 850p, particularly if it contains a high level of equity. The current terms look ludicrously low to us,&rdquo; said analyst Graham Jones at broker Panmure Gordon. He also recommended that now would be a good time for consumer goods giant Unilever to consider bidding for Cadbury as well.