Kraft Foods is reportedly preparing to formalise its original takeover proposal for UK confectioner Cadbury within a week, without increasing its offer price.

Go deeper with GlobalData

Data Insights

The gold standard of business intelligence.

Find out more


In early September, Cadbury rejected an initial GBP10.2bn (US$16.7bn) stock-and-cash takeover approach from Kraft, arguing that it “materially undervalued” the company.


Kraft now faces a 9 November “put up or shut up” deadline imposed by the UK Takeover Panel to make a firm offer for Cadbury or walk away for six months.


According to a Reuters report, which cited sources close to the situation, Kraft plans to keep a price increase off the table in order to retain the bargaining chip for later in the negotiation process. Such a move would effectively turn Kraft’s bid hostile.


Kraft is due to report its third-quarter results after the market closes today (3 November). The trading update is viewed as crucial to win investor support and dispel Cadbury chairman Roger Carr’s criticisms of Kraft’s “low-growth model”.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

In a research note, analysts at Merrill Lynch said that the earnings release provided the US food group with the opportunity to prove “the ‘old Kraft’ is continuing to turn the corner”.


The company is expected to post an increase in operating earnings in the region of 30% on volumes growth of 1%, the analysts said.


Kraft has previously indicated that it aims to improve margins to the “mid teens” by 2011, up from 12.3% last year.


If Kraft is able to post a strong set of third-quarter numbers and this in turn prompts a rise in its stock value, the value of the stock portion of the company’s offer for Cadbury would also be strengthened.


A spokesperson for Kraft declined to comment prior to the release of the group’s results.