Rosenfeld sticks to her guns on bid price

KRAFT&rsquo;s chairman Irene Rosenfeld yesterday argued that a takeover of rival Cadbury would lead to the birth of a &ldquo;global powerhouse&rdquo; in snacks and confectionary and create millions of dollars in savings.<br /><br />Rosenfeld said that a takeover of the Dairy Milk maker would lead to annual pre-tax cost savings of at least $625m, through synergies in manufacturing, administration and marketing.<br /><br />A combination of the two consumer good giants would create a global confectionary portfolio with over 40 brands, including Oreos, Toblerone and Creme Eggs. <br />But Kraft came under fire yesterday for not sweetening its original proposed offer.<br /><br />Kraft&rsquo;s hostile bid of 300p and 0.23589 Kraft shares per Cadbury share values the British confectionary group at a lower price than when Chairman Roger Carr dismissed the proposal as an &ldquo;unattractive&rdquo; and &ldquo;unappealing&rdquo; offer from a &ldquo;low growth conglomerate&rdquo;.<br /><br />Carr yesterday slammed Kraft&rsquo;s bid as &ldquo;derisory&rdquo; and said: &ldquo;The repetition of a proposal which is now of less value and lower than the current Cadbury share price does not make it any more attractive.&rdquo;<br /><br />But Kraft argued that the bid is fair and represents a 37 per cent premium to Cadbury&rsquo;s price on 3 July, before the analyst community speculated on potential sector consolidation, and a 29 per cent premium to the average share price of 555p before Kraft Foods launched its takeover offer.<br /><br />Analysts have said, however, that global markets have recovered since July, and prices would have naturally risen.<br /><br />Panmure Gordon analyst Graham Jones said: &ldquo;The world has moved on since July. And Kraft&rsquo;s offer highlights it was a simply opportunistic move by Kraft to take advantage when the markets were still weak.&rdquo;<br /><br />Kraft has repeatedly reinforced its &ldquo;financial discipline&rdquo; in acquisitions and ruled out overpaying, particularly when there is no other bidder. <br /><br />Rosenfeld is keen to maintain Kraft&rsquo;s progressive dividend plan to appease influential shareholders, which include billionaire Warren Buffet.<br /><br />Rosenfeld said: &ldquo;What we can afford is not relevant. What is relevant is what Cadbury is worth and that will guide our actions going forward.&rdquo;<br /><br />Hargreaves Lansdown analyst Keith Bowman said: &ldquo;Kraft are demonstrating that they will not be pushed into anything just because of a time frame &ndash; for now they are happy to agree to disagree on pricing.&rdquo;