Cadbury Chairman Insults Kraft in Open Letter

It wasn't enough for Cadbury to simply reject Kraft's surprise $16.7 billion takeover offer. Cadbury chairman Roger Carr had to spell out just how "unappealing" and "unattractive" he finds the prospect of a merger with "a low growth conglomerate" like Kraft.

In an open letter to Kraft CEO Irene Rosenfeld, Carr described Kraft as "a company with a considerably less focused business mix and historically lower growth [than Cadbury]" and he reiterated that Cadbury is doing perfectly well on its own, thank you very much.

But the letter also included a detailed breakdown of exactly why Cadbury is worth more than Kraft offered, and many are reading Cadbury's talk of independence as part of a clever bluff to provoke a higher bid -- be it from Kraft or from someone else.

When Cadbury first said that Kraft's offer undervalued the company, Kraft VP Michael Osanloo retorted, "The simple fact is that Cadbury is worth what someone is willing to pay for it -- nothing more." But Kraft's offer has dropped in value since last week, as Kraft's stock price and the strength of the dollar have both fallen -- and Cadbury's stock value has gone up, all of which will have to be reflected when Kraft makes its formal bid.

What remains to be seen is whether any other companies will jump in with competing offers. There has been a lot of speculation on that front, but so far no action.

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