UK: Don't let Kraft “steal” company - Cadbury

UK confectioner Cadbury this morning (12 January) stepped up its defence against Kraft Foods, telling shareholders it has enjoyed an "outstanding" year.

Cadbury chairman Roger Carr urged shareholders not to let Kraft "steal" the Dairy Milk maker and reiterated its board's unanimous rejection of the US food group's GBP10.5bn hostile offer.

Publishing its second response document following the offer posted by Kraft on 4 December, the Cadbury board rebuffed Kraft's "wholly inadequate offer" and once again recommended that shareholders take no action on the offer.

Cadbury also revealed some 2009 figures and said underlying revenues had grown 5% during the year, climbing 6% rise in the second half of 2009. The company's trading profit margin rose to 13.5% from 12%.

Cadbury also said it expects its full-year dividend to grow 10% on last year.

The firm said its 2009 performance was "well ahead" of market expectations, driven by "strong growth" in the fourth quarter and the savings generated by Cadbury's Vision into Action business plan.

"Our performance in 2009 was outstanding," said CEO Todd Stitzer. "Looking forward to 2010, we are targeting revenue growth within our 5-7% goal range, led by new product innovations across our categories and supported by incremental investment in marketing."

"We expect benefits from our restructuring and reconfiguration actions in 2010 to drive continued progress to achieve our targets of good mid-teens margin by 2011 and 16-18% margin by 2013."

Since Kraft's first approach on 4 September, Cadbury said its "stand-alone" value has risen further because its 2009 performance was ahead of previously upgraded expectations.

"The majority of the offer consideration comprises Kraft's shares; this is unappealing given Kraft's unattractive business model and poor track record of delivery," Cadbury said. "Kraft has an unfocused, conglomerate business model with significant exposure to lower growth categories and a track record of missed financial targets."

Click here to see the full release or check back later for further insight into Cadbury's defence document.