Jan. 12 (Bloomberg) — Cadbury Plc<\/a>, the U.K. confectioner fighting a hostile bid from Kraft Foods Inc., urged shareholders to reject the U.S. foodmaker\u2019s \u201cwholly inadequate\u201d offer after posting a surge in 2009 profit.<\/p>\n <\/p>\n <\/p>\n Operating profit rose 27 percent to 808 million pounds ($1.3 billion), the Uxbridge, England-based company said in a statement today. Sales rose 11 percent to 6 billion pounds. Analysts anticipated profit of 806 million pounds and revenue of 6 billion pounds, according to estimates compiled by Bloomberg. <\/p>\n The results may encourage shareholders to hold firm for a higher offer, said Jon Cox at Kepler Capital Markets. Kraft\u2019s \u201cderisory\u201d <\/a>offer<\/a> values Cadbury at 12 times 2009 earnings before interest, tax, depreciation and amortization, lower than similar transactions, the U.K. company said. The shares of rival companies have risen an average of 12 percent since Kraft made its approach, it said. <\/p>\n \u201cIt\u2019s a good, crackerjack set of figures but does it really change anything too much? I\u2019m not so sure,\u201d said Cox in a Bloomberg Television interview today. <\/p>\n <\/p>\n Cadbury\u2019s shares were unchanged at 781 pence in London today. Kraft\u2019s Kraft\u2019s cash-and-stock offer is currently worth about 763 pence. <\/p>\n The confectioner\u2019s shares briefly fell below the offer price last week after Hershey Co.\u2019s executives and board members were said to be divided about whether to make a bid for Cadbury. Warren Buffett\u2019s<\/a>Berkshire Hathaway Inc.<\/a> also said it will vote against Kraft\u2019s plans to issue new shares to fund part of the deal. <\/p>\n Dividend Increase <\/p>\n Cadbury\u2019s full-year dividend<\/a> rose 10 percent to 18 pence. The company has forecast a \u201cdouble-digit\u201d increase in annual dividends over the medium term. <\/p>\n The defense document \u201cdoesn\u2019t add anything new to the debate in our view,\u201d Nomura International analyst Alex Smith<\/a> wrote in a note to clients today. \u201cWe still see a majority probability of a successful Kraft takeover at a higher price of around 840 pence.\u201d <\/p>\n Similar takeovers in the industry have been done at between 14.3 times earnings and 18.5 times, Cadbury said in the statement. Food industry takeovers have been down at an average multiple of about 16.2 times earnings, according to Sanford C. Bernstein research. Nestle SA<\/a> last week bought Kraft\u2019s pizza business for 12.5 times earnings. <\/p>\n \u201cApplying any of the comparable multiples would imply a price per share far above Kraft\u2019s offer,\u201d Cadbury Chairman Roger Carr<\/a> said in the statement. \u201cKraft\u2019s offer is even more unattractive today than it was when Kraft made its formal offer in December.\u201d <\/p>\n Cadbury\u2019s 2009 operating margin<\/a> rose 1.6 percentage points to 13.5 percent, wider than the company\u2019s Dec. 14 forecast of \u201cat least\u201d 13.3 percent. Cadbury\u2019s 2009 earnings before interest, tax, depreciation and amortization were 1.02 billion pounds. <\/p>\n The confectioner today forecast 2010 revenue growth within its 5 percent to 7 percent range, driven by the release of new products.<\/p>\n Share Investor Links<\/span><\/a><\/a><\/p>\n Share Investor Blog<\/a> – Stockmarket & Business commentary Recommended Amazon Reading<\/span><\/p>\n<\/a>
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Jan. 12 (Bloomberg) — Jon Cox, analyst at Kepler Capital Markets, talks about Cadbury Plc’s 2009 sales performance and the hostile bid from Kraft Foods Inc. The U.K. confectioner said sales and profitability rose in 2009 and urged shareholders to reject the U.S. foodmaker\u2019s offer on valuation grounds. Cox speaks with Bloomberg’s Francine Lacqua and Poppy Trowbridge in London. <\/div>\n<\/p><\/div>\n
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