Monday 19 March 2018

Cadbury calls on investors to spurn Kraft

Andrew Cleary

British confectioner Cadbury said sales and profitability rose in 2009 and urged shareholders to reject Kraft’s offer on valuation grounds.

So-called base business revenue rose 5pc on a constant currency basis, the company said in a statement today. The operating margin rose 1.6 percentage points to 13.5pc.

Cadbury expects full-year dividend growth of 10pc. Kraft’s “derisory” offer values Cadbury at 12 times 2009 earnings before interest, tax, depreciation and amortization, lower “than any comparable transaction in the food industry,” the UK company said.

The Dairy Milk maker also said the share prices of similar companies have risen by an average of 12pc since Kraft made its approach.

“Kraft’s offer is even more unattractive today than it was when Kraft made its formal offer in December,” Cadbury Chairman Roger Carr said in the statement. “Our 2009 performance is ahead of our previously upgraded expectations and we have excellent momentum going into 2010.”

The confectioner forecast 2010 revenue growth within its 5pc to 7pc range.


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