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| Kraft deal makes strategic sense: Cadbury chief |
| Press Trust of India / New York Sep 22, 2009, 16:38 IST |
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Easing its stance on the takeover bid from Kraft Foods, Cadbury has said the combination with the US food major makes "some strategic sense", even as the British confectionery firm has approached the UK takeover regulator to put Kraft on notice for formalising its bid soon.
According to The Wall Street Journal, the request by Cadbury seems to be designed to put pressure on Kraft to raise its $16.7 billion (10.2 billion pounds) bid for Cadbury, two weeks after making public its takeover proposal.
Attributing to people familiar with the matter the report said Cadbury has asked the UK panel on Takeovers and Mergers to issue an order demanding that Kraft make a formal bid with committed financing.
In a separate report, UK daily Financial Times also said that Cadbury approached the UK Takeover panel on Monday to ask Kraft either to make a formal takeover proposal or walk away for six months.Meanwhile, Cadbury CEO Todd Stitzer's interview to the The Wall Street Journal has suggested a more conciliatory tone from the British company, which had rejected Kraft's bid.
"I would never say there's not some strategic sense in these businesses coming together," Stitzer said.
Citing an open letter to Kraft earlier this month, the WSJ report said the British confectionery group had called a tie-up of the companies "an unappealing prospect which contrasts sharply with our strategy."
Stitzer further said Cadbury shareholders oppose the deal at the price currently proposed by Kraft and want Cadbury to concentrate on its operations unless the foods major makes a higher offer for the British company.
"Their view is, keep doing what you're doing, and in the absence of any higher value, stay focused. "If a higher bid does not materialize, I think our shareowners will have to decide whether or not the value of our plan or the value of whatever offer's on the table is appropriate," Stitzer said.
The WSJ report quoted a spokeswoman for Kraft as saying, "we have clearly outlined our strategic rationale for a possible combination with Cadbury."
Stitzer told the daily that under his plan, Cadbury has a promising future as an independent company and could overtake Mars Inc, as the world's biggest confectionery company, through organic growth and targeted acquisitions in the next three to five years.
The report quoted Stitzer as saying "I completely respect the fact that we would be attractive to someone else, but the world of large conglomerates has passed, "Shareowners recognize that focused businesses, and focused in an area that has commercial and operational synergies, is a very good space to be," he added.
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