NEW YORK (
) -- Starting Monday,
( KFT) is set to face a barrage of criticism from
( CBY) executives, union leaders and possibly lawmakers, with Cadbury leaders including CEO Todd Stitzer kicking it off.
Stitzer had prepared a formal defense of Cadbury that underlined its unique history, the importance of keeping the confectioner as an independent company, and Fairtrade connections to convince shareholders to turn down Kraft's offer. Even British Prime Minister Gordon Brown had gotten involved, telling a local radio station "I think it is very important that we don't have a hostile bid for Cadbury which is an asset stripping bid."
Union leaders at Cadbury have been fearful, furious and deeply suspicious of the Kraft bid, convinced that Kraft would enact massive layoffs among the 6,000 strong workforce in the UK and Ireland if the takeover succeeds.
The union leaders have also been reaching out to shareholders and warning of a fall in share prices if Kraft succeeds. On Tuesday, Cadbury workers will
to protect the company's independence, and on Wednesday they will take their concerns to the British parliament.
Kraft had approached the British chocolate, gum and candy maker with a $16.3 billion cash and share offer, currently worth 725 pence against Cadbury's share price of 787 pence. The board had outright rejected the derisory bid so Kraft took it straight to the shareholders without raising the bid. Cadbury and Kraft analysts believe that Kraft will have to sweeten the deal to at least 820 to 850 pence to get Cadbury to even consider an offer.
Kraft has been ogling Cadbury as an opportunity of lifetime that would give Kraft the global reach -- as well as the chocolate and Trident gum brands to give it a shot at rivaling the consumer goods giant that was created when
bought Wm. Wrigley last year. Cadbury has been an attractive buyout target for several companies including
, which Stitzer said shares cultural similarities with Cadbury, and Italian chocolate maker Ferrero.
may also be eyeing Cadbury.
Kraft sees Cadbury as a highly desirable fit for the company, yet it has not changed its bid from the 300 pence in cash and the rest in new Kraft shares announced on Sept. 7. Analysts say Kraft will have a hard time raising the bid by much with its current debt situation, though a $9.2 billion loan could help the company raise its cash offer by 100 pence without losing the investment grade rating for its debt, according to Reuters.
Meanwhile, the clock is ticking and Kraft now has only until January 19 to raise its offer -- and until February 2 to persuade shareholders to accept the deal. What do you think Kraft's next move should be? Should it sweeten its bid for Cadbury?
-- Reported by Andrea Tse in New York
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