LONDON—In response to an unsolicited offer by Kraft Foods Inc., Cadbury released a statement recommending that shareholders reject an offer Cadbury chairman Roger Carr says “does not come remotely close to reflecting the true value of our company, and involves the unattractive prospect of the absorption of Cadbury into a low growth conglomerate business model.”
The $16.3 billion Kraft bid offered Cadbury shareholders about .50 cents (300 pence) in cash and 0.2589 new Kraft shares for each Cadbury share. This cash price per share and exchange ratio are unchanged from Kraft's bid on Sept. 7, Cadbury notes, but “due to the fall in the Kraft share price since then, the implied value for each Cadbury share is around 4% lower. Therefore, the Offer is worse than the proposal that the Board has previously rejected as fundamentally undervaluing Cadbury and its prospects,” according to the statement.
