Resistance melts as Kraft raises bid for Cadbury

Cadbury today backed a higher £11.5bn (€13.14bn) recommended takeover offer from its US suitor Kraft Foods.

Philadelphia cheese maker Kraft said it had the support of the Cadbury board after tabling a revised offer worth 840 pence a share.

Kraft boss Irene Rosenfeld said the food giant had “great respect for Cadbury’s brands, heritage and people” as it outlined details of the deal.

If accepted by shareholders, it will end an independent history for the Dairy Milk maker that dates back to 1824.

Cadbury's board is unanimously recommending its shareholders back the bid in what marks a turnaround in the hotly contested takeover battle.

The group’s bosses have described Kraft’s previous hostile approaches as “derisory”.

But Roger Carr, chairman of Cadbury, said: “We believe the offer represents good value for Cadbury shareholders and are pleased with the commitment that Kraft Foods has made to our heritage, values and people throughout the world.

“We will now work with the Kraft Foods’ management to ensure the continued success and growth of the business for the benefit of our customers, consumers and employees.”

Kraft faces strong opposition from UK trade unions amid job loss concerns.

Cadbury employs around 45,000 people in 60 countries, with 5,600 staff at eight manufacturing sites in the UK and Ireland, including around 1,000 at their Irish facilities in Coolock in Co Dublin and Rathmore in Co Kerry.

Trade union Unite fears that some 7,000 jobs at Cadbury would be threatened if the takeover goes ahead, because of a “colossal” £22bn (€25bn) of debt it believes would swamp the group.

Cadbury shareholders now have until February 2 to accept Kraft’s revised bid, which has been upped from an initial approach worth just over £10bn (€11bn).

Kraft also said today that it was lowering the shareholder acceptance level to a simple majority of 50%.

As well as 840p a share, Kraft is also offering a previously announced Cadbury dividend of 10p a share.