Kraft's $16.4B Cadbury Bid Starts Takeover Tussle

EMILY FREDRIX

NEW YORK (AP) — Kraft Foods has gone hostile in its bid to buy Cadbury but didn't sweeten its first bid, drawing an immediate rejection from the British candy maker in what is likely to be a lengthy takeover struggle.

Taking the same offer directly to Cadbury shareholders likely means that Kraft is betting no competing bids will emerge for the maker of Dairy Milk and Creme Eggs. The early gambit also leaves the company room to take the bid higher.

Kraft made the offer, worth about $16.4 billion, just hours before a Monday deadline imposed by Britain's takeover law that required the company to make a formal offer or back off for six months. Kraft now has 28 days to file a prospectus, which will then trigger more deadlines that could last months.

The maker of Oreo cookies, Oscar Mayer meats and Nabisco crackers maintained its offer of 300 pence in cash and 0.2589 new Kraft shares. But the deal's value fell from its original $16.7 billion because Kraft's shares have fallen since the first offer was announced in September.

Cadbury Chairman Roger Carr offered a blunt assessment of the bid: "Kraft's offer does not come remotely close to reflecting the true value of our company."