Kraft Foods has formalised its bid for UK confectioner Cadbury without sweetening the offer – turning the US food giant’s takeover attempt hostile.

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The Toblerone-to-Cote d’or chocolate maker has offered Cadbury shareholders 300 pence and 0.2589 new shares in Kraft for every Cadbury share, or 1,200 pence cash and 2.0356 new Kraft shares for each Cadbury ADS.


This offer was originally proposed by Kraft in September, only to be roundly rejected by Cadbury management as “materially undervaluing” the company and its future prospects.


Kraft said the terms of the offer reflect Cadbury’s recent interim management statement – when the company booked third-quarter sales growth of 7% and said that it expected full-year turnover in the “middle” of its 4-6% range.


In its statement today (9 November), the US group insisted that its current trading and prospects are “strong” and suggested that, through the share component, Cadbury shareholders would reep the benefits of the combination, including synergies.

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However, the the share component of the deal has come under fire from Cadbury management, who have argued that Kraft offers a “low growth” model. Last week, Kraft saw comparable profits jump on margin gains, but posted a decline in third-quarter sales of 5.7%


Throughout the acquisition process, Kraft has insisted that it remains committed to a “financially disciplined” approach to any deal, with the goal of boosting EPS in the second year.


“We believe that our proposal offers the best immediate and long-term value for Cadbury’s shareholders and for the company itself compared with any other option currently available, including Cadbury remaining independent,” Kraft CEO Irene Rosenfeld insisted.


Cadbury shares increased 1.39% immediately following the announcement, climbing to 769.5 pence at 1.35pm (GMT).