More Drama and Mixed Messages in Kraft-Cadbury Flirtation

Last Updated Sep 25, 2009 5:02 PM EDT

In case there was any confusion about what Cadbury CEO Todd Stitzer meant when he said, "I would never say there's not some strategic sense in [Kraft and Cadbury] coming together," Cadbury has come forward to clarify things. Apparently Stitzer meant to add, "I mean, it's completely true; there's no strategic sense whatsoever; we hate those guys. But I would never say that."

To quote Cadbury directly, "Mr. Stitzer does not believe that Kraft's proposal makes strategic or financial sense for Cadbury and his comments should not be interpreted in any other way."

Kraft recently made a surprise $16.7 billion bid for the British confectionery company, but Cadbury shunned the offer -- though many speculate that the company is secretly holding out for a higher price.

Cadbury's backtracking on Stitzer's statement may seem ridiculous, but the company has good reasons. The Financial Times reports that in the U.K., "companies subject to takeovers are constrained from disclosing their views on the bid selectively." Cadbury has been trying to get the U.K. Takeover Panel to set a deadline for Kraft to make its bid official, and contradictory messages could jeopardize these efforts.

But on the other side, some investors think Stitzer's other comments have been too harsh, as Kraft is unlikely to pay more.

For its part, Kraft is trying to downplay its interest. CEO Irene Rosenfeld has pledged not to overbid on Cadbury -- or, in her words, to allow the company's "animal instincts ... to take over."

Animal instincts? Seriously? Dan Mitchell at Daily Bread has described the situation as a "farce," but to me it's looking more and more like a really bad romantic comedy.

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  • Katherine Glover