Cadbury says Kraft takeover bid 'unappealing'

LONDON: Cadbury PLC stepped up its defense against a hostile takeover bid from Kraft Foods Inc by saying on Tuesday its full-year results will beat market expectations.

The British chocolate and gum maker, which is fighting to remain independent, argued that the share portion of Kraft's 10.3 billion pound ($16.5 billion) offer is unappealing because of the US company's ``poor track record of delivery.''

Kraft has until February 2 to line up a majority of Cadbury shareholders to accept the offer.

Cadbury said it expected to report 5 per cent growth in business revenue for 2009, or 11 per cent higher on an actual currency basis. It said it had improved its trading margin by 1.55 percentage points to 13.5 per cent.

In contrast, Cadbury described Kraft as ``an unfocused, conglomerate business model with significant exposure to lower growth categories and a track record of missed financial targets.''

Kraft shares are worth 42 per cent less than in the initial public offering price in 2001, Cadbury said.

Cadbury said Kraft's offer equals 12 times earnings before interest, taxes, depreciation and amortization, while comparable transactions in the sector have ranges from 14.3 to 18.5 times EBITDA.

``Kraft's offer is very significantly below all comparable transactions in the sector; applying any of the comparable multiples would imply a price per share far above Kraft's offer,'' Cadbury chairman Roger Carr said.

``Over half the offer consideration is in the form of Kraft shares, exposing our shareholders to Kraft's low growth conglomerate business model, its long history of under-performance and its track record of missed targets.''

Cadbury says it will publish further details of its 2009 results on Thursday.