Cadbury holding firm against Kraft?

With Cadbury's rejecting Kraft's bid of over $15 billion, industry analysts are wondering what the next step for Kraft will be.

Michael Osanloo, Executive Vice-President of Kraft, has stated that the US food-giant will remain "financially disciplined" in its pursuit of British confectionery firm Cadbury saying,

"There has been a lot of talk about what Cadbury is worth...The simple fact is that Cadbury is worth what someone is willing to pay for it - nothing more."

He added, "we are the most logical buyer but we will remain financially disciplined."

Some industry experts have theorised that Kraft Food's interest in the chocolate giant could spark off a bidding war. Deborah Cross, an industry analyst for food and beverage ingredients at Frost & Sullivan, said in a recent interview to Talking Retail,

"Cadbury's rejection of Kraft's recent bid is likely to promote further interest in the company from alternative confectionery companies, and looks likely to result in a further bid from Kraft.

"Kraft's initial bid may have undervalued the company, but further more generous offers are expected, and a price offer of around 100p to 150p extra per share would present a fairer and more attractive bid proposition for completion of the deal."

However, despite rumblings of a possible joint venture from Nestle and Hershey, such a bis has yet to emerge. Nestle especially haven't shown any interest, with CEO Paul Bulcke

A possible hostile takeover from Kraft has not been ruled out through with Irene Rosenfeld

In 2008, Cadbury had 10.3 percent of the world confectionery market, second only to Mars's 14.8 percent. Kraft, whose chocolate brands include Milka and Toblerone, was fifth at 4.5 percent. If the deal were to succeed, the enlarged group would seriously challenge Mars and have an annual turnover of over $50 billion.

Some Kraft shareholders aren't too sure though, with the company's shares falling around 6 percent on the saying the company had no plans for any big acquisitions in 2009 or 2010. reputably saying the option is still on the table and it's clear to see why. New York Stock Exchange as shareholders weighed up the likely impact on its finances of such a large acquisition. Things weren't so bad for Cadbury's however; share prices soared 40 percent indicating that investors feel a merger would be beneficial to the UK firm.

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