Cadbury rejects Kraft’s $19.6 billion bid
British confectionery group Cadbury has rejected a $19.6 billion bid from Kraft Foods.
After Kraft’s proposed bid, shares in Britain closed almost 1.7 percent higher and Cadbury shares jumped 38 percent to its highest levels in more than two years.
Analysts are interpreting the bid as a sign of confidence from company managers about their future prospects in light of global recovery currently underway.
However, Cadbury said in a statement Kraft’s bid undervalued the company and its prospects. Cadbury added that it was confident in its standalone strategy, boasting a strong brand, category, geographic scope and continued success of its cost savings plan.
Despite the rejection, Kraft has vowed it would continue to work towards a recommendation from Cadbury for its bid. Analysts believe a much larger cash element would be needed for the deal to succeed.
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