Cadbury, the British candy maker, has rejected a renewed $16.4 billion hostile bid from Kraft Foods Inc. on Monday. Kraft refused to increase the previous offer and Cadbury is calling it a hostile bid.
In Britain, 195-year-old Cadbury is a much-loved brand. Its Dairy Milk is the country's top-selling chocolate bar. There wasn't much sweet talk going on when Kraft offered a mixture of cash and shares for each Cadbury share -- these were exactly the same terms Kraft proposed in September.
Cadbury's stock initially dropped as much as 2 percent after Kraft's announcement, but soon began to inch up again. If Kraft and Cadbury combine are combined, it would create a company that generates at least $50 billion in total revenue.
Kraft is the largest food company in the U.S. and number two worldwide to Nestle. However, Nestle which would keep its number one position even if Kraft adds Cadbury.
There was speculation that industry rivals would start a bidding war when Kraft made its initial offering in September. However, the big rival -- U.S. candymaker Hershey Company -- has yet to come forward.
Felicity Loudon, the granddaughter of former Cadbury Brothers managing director Egbert Cadbury, has also been an outspoken critic of any deal. She has been quoted as saying she was "particularly saddened by the possibility of one of the last remaining British icons disappearing into an American plastic cheese company."
With Cadbury's shares recovering after the bid rejection, Kraft shares slipped 35 cents to $26.43 in New York.
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