Kraft Foods has this morning (15 December) hit back at Cadbury’s defence against the US food giant’s hostile takeover bid, with the Milka chocolate maker claiming the UK firm’s investors are leaving themselves open to “significant risk”.

Cadbury, which has received a GBP10bn (US$16.25bn) cash-and-stock offer from Kraft, spent yesterday outlining its formal “defence document” and setting out plans for boosting sales, margins and dividends between now and 2013.

Roger Carr, chairman of Cadbury, labelled Kraft’s bid as “derisory on a good day” as he revealed the Dairy Milk maker’s targets to grow revenue by 5-7% a year, improved underlying operating margins and double-digit growth in dividends.

However, Kraft has issued a statement that insisted Cadbury shareholders are being asked to “choose between having the value certainty and upside potential of the offer versus taking the risk of continuing to own Cadbury shares in the absence of any offer”.

The Toblerone and Terry’s Chocolate Orange maker repeated its claim that its bid offered Cadbury investors a “substantial premium” to the UK firm’s “unaffected” share price.

Kraft also argued that the fall in its share price since the company first went public with its interest in Cadbury in September is due to “a number of deal-related factors of a short-term nature, which are expected to dissipate once there is clarity over the outcome of Kraft Foods’ offer”.

The company continued: “Kraft Foods believes that a combination with Cadbury will provide the potential for meaningful revenue synergies and significant cost savings, delivering substantially more value than Cadbury could achieve on its own.”

The Kraft statement also contained a series of questions on Cadbury’s higher earnings and sales targets. A recurring theme was Kraft’s belief that Cadbury has given its shareholders “very little information” on the UK firm’s guidance for 2010.

Kraft chairman and CEO Irene Rosenfeld added: “We have heard nothing from Cadbury that surprises us. Cadbury’s defence document only reinforces our belief that there is a compelling strategic and financial rationale to combining these two companies and that doing so would be in the best interest of both companies’ shareholders.”

The analyst community still broadly believes that Kraft will have to raise its offer to stand a chance of succeeding in its pursuit of Cadbury. Some analysts, however, have questioned whether the maker of Trident gum and Halls candy will meet its 2013 targets.