Kraft deal an “unappealing prospect”: Cadbury
A letter sent by Cadbury Chairman Roger Carr has further highlighted Cadbury’s lack of interest in the current multi-billion proposal put forward by Kraft.
Last week, the markets were buzzing with news that Kraft had made an offer to the UK-based confectioner worth close to A$20 billion, but expectations of a deal are fading.
In a letter to Kraft CEO Irene Rosenfeld, Mr Carr said the proposal undervalued the maker of Diary Milk and a combination with Kraft was an “unappealing prospect”.
“In my letter of 31st August, I informed you that the Board had rejected your unsolicited proposal on the grounds that it is unattractive and fundamentally undervalues Cadbury,” he said in the letter. “Under your proposal, Cadbury would be absorbed into Kraft’s low growth, conglomerate business model, an unappealing prospect which contrasts sharply with our strategy to be a pure play confectionery company. I also re-affirmed the Board’s confidence in our future prospects as an independent company.”
“There is nothing in your letter dated 7th September, or your various announcements on and since that date, to change our view.”
Mr Carr was adamant that moves made by Cadbury over recent years to demerge their beverage assets and make themselves a pure play confectionery business would see them reap great reward in the years ahead.
“We have created a pure play confectionery business with strong brands occupying leading market positions in both developed markets and high growth emerging economies – a business of considerable inherent value, impossible to replicate and with a unique position in the global confectionery market,” he contended.
Cadbury’s Chairman said the company understood “the attraction of (the Cadbury) business” but saw it remaining an independent entity.
“We are committed to the delivery of optimum value to our shareholders and our Board remains convinced that this is achieved through continuing to deliver our standalone pure play confectionery strategy.”
