Post-deadline, Kraft sticks to £ 9.8-billion offer for Cadbury bid

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: Kraft Foods Inc, the maker of Oreos and Ritz crackers, stuck to its initial bid in an unsolicited offer to buy Cadbury Plc for £ 9.8 billion ($16 billion) that may make it the world’s largest confectioner.

Kraft offered 300 pence in cash and 0.2589 new Kraft share per Cadbury share, the same as a bid made public on September 7, the Northfield, Illinois-based company said on Monday in a statement. As of last week’s closing prices, the bid values Cadbury at 717 pence a share, about 6% below the current price. The offer’s value has declined from its initial 745-pence level as Kraft shares have fallen.

Cadbury, the maker of Dairy Milk chocolate, rejected the bid, saying the offer is now worthless and the initial proposal had already undervalued the company. In September, Cadbury said it was confident in its prospects as an independent entity and called the original proposal from Kraft chairman and chief executive officer Irene Rosenfeld an “unappealing prospect” from a “low-growth” conglomerate.

“I’m not sure what kind of appetite Cadbury holders have to hold on while these two slug it out for the next six months,” said William Hobbs, who helps manage £ 134 billion in assets, including Cadbury shares, at Barclays Wealth in London. “Anything under 800 pence is still a pretty chunky discount to what we could get.” Cadbury shares fell as much as 2.4% after Kraft’s announcement, before erasing their decline. They advanced 2.5 pence to 760.5 pence at 2 pm London time.

Kraft was little changed in early trading after declining 25 cents to $26.78 on November 6 on the New York Stock Exchange. “The repetition of a proposal which is now of less value and lower than the current Cadbury share price does not make it any more attractive,” Cadbury chairman Roger Carr said in a statement on Monday.