Cadbury Plc on Tuesday rebuffed US-based Kraft Food's "derisory" takeover offer, citing "outstanding" financial performance in 2009 and reiterated that shareholder value will be maximised if it remains an independent entity.
The British confectioner had earlier rejected Kraft's over 10-billion pounds hostile cash-and-stock bid, saying it undervalued the company.
In its defence document against Kraft offer, Cadbury on Tuesday said its financial performance in 2009 was "outstanding" and well ahead of market expectations, and that it anticipates "excellent momentum" going into 2010.
"Our performance in 2009 was outstanding. We generated good revenue growth despite the weakest economic conditions in 80 years," Cadbury's CEO Todd Stitzer said in a statement.
The British company noted that its "standalone value" has increased further since Kraft's approach in September 2009. Kraft's original offer was 300 pence and 0.26 Kraft shares for every Cadbury stock.
Last week, the US firm said it would raise the cash component of the bid by 60 pence. Appealing to shareholders, Cadbury's Chairman Roger Carr said, "don't let Kraft steal your company with its derisory offer".
He asserted that Kraft's offer is even more unattractive today than it was when the formal offer was made in December. The statement noted the board was committed to maximising shareholder value, best achieved through "strong continuing performance of an independent Cadbury".
Meanwhile, only 1.5 per cent of Cadbury shareholders have accepted Kraft's initial takeover offer. Carr noted that Kraft's offer was "very significantly" below all comparable transactions in the sector.
With over half of the offer consideration in the form of Kraft shares, Carr said that Cadbury shareholders would be exposed to the US entity's low growth conglomerate business model, its long history of underperformance and track record of missed targets. The firm said that good performance in 2009 was mainly driven by strong growth in the fourth quarter and recorded a five per cent base business revenue growth.
Stitzer pointed out that looking forward to 2010, the firm is "targeting revenue growth within our 5-7 per cent goal range, led by new product innovations across our categories and supported by incremental investment in marketing".
The American firm has time till January 19 to make the final offer for Cadbury. Kraft offered more cash for the takeover, after selling its North American pizza business for $3.7 billion to Nestle.
However, Kraft's takeover proposal has been opposed by its top shareholders Berkshire Hathaway. Billionaire Warren Buffett-led conglomerate has voted against Kraft's move to issue up to 370 million shares to facilitate the Cadbury acquisition.
