Kraft questions Cadbury's upward growth forecast

Asserting that its 9.8-billion pound takeover bid for Cadbury represents a substantial premium, Kraft Foods today questioned the upward growth forecast provided by the British confectionery maker.

The US food major in a statement noted that Cadbury's long term growth targets are given with "very little information on prospects for 2010".

Kraft said the "(9.8 billion pounds-takeover) offer represents a substantial premium to the unaffected share price of Cadbury".

The latest comments come a day after Cadbury rejected the acquisition offer and had described it as  "derisory". Kraft has also raised questions over the British firm's growth target, asking how the company would meet these projections.

"Cadbury is asking its shareholders to put their faith in possible future value creation based on a set of long-term targets, never before achieved by Cadbury," Kraft said.

The British entity on Monday had revised its annual sales projection upwards in the range of 5-7 per cent from the earlier 4-6 per cent and said it expects strong momentum in emerging markets, including India.

It is also expecting an operating margins of 16-18 per cent by 2013 after reportedly projecting good mid-teens margin by 2011.

Cadbury said emerging markets, led by India, the Middle East and Africa and South America, continue to show strong momentum this year.

Commenting on Cadbury's statement, Kraft Foods Chairman and CEO Irene B Rosenfeld said the company has heard nothing that is surprising.

"Cadbury's Defence Document only reinforces our belief that there is a compelling strategic and financial rationale to combining these two companies and that doing so would be in the best interest of both companies' shareholders," Rosenfeld added.