Kraft flexes its muscles in Cadbury fight

KRAFT Foods chairman and chief executive Irene Rosenfeld yesterday hinted the US food giant is ready to get tough in its bid to take over Cadbury, a day after the chocolate maker rejected its initial &pound;10.2bn indicative offer.<br /><br />Rosenfeld told US analysts in a conference call that Kraft &ldquo;has been and will continue to be disciplined&rdquo; in its attempt to buy Cadbury, which owns Britain&rsquo;s beloved Dairy Milk brand.<br /><br />She added that the offer of 745p a share for Cadbury, made up of 300p in cash and 0.2589 new Kraft shares, represented &ldquo;a significant premium for shareholders and well above what they themselves are expected to deliver&rdquo;.<br /><br />But analysts recommended the firm ups its offer substantially to secure the support of the Cadbury board.<br /><br />&ldquo;Kraft&rsquo;s offer for Cadbury is a serious move, but some way short of the knockout blow required to capture what is a trophy asset,&rdquo; said Martin Deboo, analyst at Investec Securities. &ldquo;Kraft ought to be willing to sweeten the deal up to circa 875p per share.&rdquo;<br /><br />Rosenfeld also stressed the competitive advantages of completing the deal, which would put the combined group on an even footing with Mars after the chocolate giant last year created the world&rsquo;s largest confectionery group with its $23bn (&pound;13.9bn) purchase of gum specialist Wrigley.<br /><br />&ldquo;Given the complexion of the market and the global landscape, we believe it would be difficult for Cadbury to go it alone,&rdquo; she said.<br /><br />Kraft shares dipped 5.9 per cent over the course of US trading to close at $26.45.<br />