Cadbury rejects Kraft's second bid

British confectionery major Cadbury on Monday asked its shareholders to reject rival Kraft Foods' 9.8-billion-pound offer, dismissing the US-based company's second bid in as many months.

"Kraft is trying to buy Cadbury on the cheap to provide much needed growth to their unattractive low-growth conglomerate business model.

"Don't let Kraft steal your company with its derisory offer," Cadbury's Chairman Roger Carr said in a circular to its shareholders.

Kraft had come up with a 9.8 billion pounds acquisition bid for Cadbury. Last month, the British entity's board had rejected the offer, saying the bid undervalues the company.

Stressing that the board is committed to maximizing shareholder value, the maker of 'Dairy Milk' noted that the same is achieved "through the strong continuing performance of an independent Cadbury".

Defending its stance against the US entity, Cadbury revised its annual sales projection upwards in the range of 5-7 per cent from the earlier 4-6 per cent and said it expects strong momentum in emerging markets, including India.

It is also expecting an operating margin of 16-18 per cent by 2013 after reportedly projecting good mid-teens margin by 2011.

Cadbury said emerging markets, led by India, the Middle East and Africa and South America, continue to show strong momentum this year.

"Cadbury is an exceptional business worth much more than the offer put forward by Kraft. It is clear to all that Cadbury is a particularly attractive asset in the sector with iconic brands, a sharp category focus and an enviable geographic footprint," Carr said.

In November, the US company had made a formal bid for the British entity and offered 300 pence in cash and 0.2589 new Kraft Foods shares for each Cadbury share. The offer valued the company at 9.8 billion pounds.