Kraft Isn't Trying to Steal Cadbury: Today's Outrage

NEW YORK (TheStreet) -- Kraft(KFT Quote) is trying to gobble up Cadbury(CBY Quote) and offering a decent 31% premium, but the British candymaker thinks it's worth more.

Funny that Cadbury shares have languished in the 500-600 pence range since 2004 (with only a few short-lived bumps above 700p) and suddenly the company thinks it's worth more than the 745 pence offer from Kraft.

Investors, taking their cues from the rejection of the bid by Cadbury management, pushed the shares up above 800 pence. I don't blame them for trying, but if this deal fails then it's back to the 500-600 range for Cadbury shares. No one is going to believe that management can get the shares back to the 800 level on its own.

Cadbury stock ended last week at 568 pence before the Kraft announced its offer of 300 pence in cash and about a quarter of a Kraft share for each Cadbury share.

Yes, that's right, Cadbury investors only thought the company was worth 568 pence a share at the end of last week. Now they're giddy for 800p.

I happen to think the current bid is a wonderful show of strength, especially considering Kraft will have to pay with weak dollars to buy the U.K. candy maker whose shares are priced in powerful pounds.

We all know how bidding works, so Kraft will likely come back with a higher offer and will no doubt have to add more cash to get a mix that's sweet enough.