London, Dec 14 (IANS) Britain-based global confectionery and processed foods major Cadbury Monday rejected the $16.7-billion hostile takeover bid by Kraft of the US, saying it “substantially” undervalues the company.
“Cadbury is an exceptional business worth much more than the offer put forward by Kraft,” said company chairman Roger Carr in a statement to shareholders.

“Kraft’s offer fails to recognise the value of Cadbury’s performance to date and the benefits of completing the vision-into-action plan set out in June 2007,” said the company, referring to a growth plan it had unveiled in 2007.

The US food giant was offering around 300 pence in cash and 0.26 new Kraft shares for each Cadbury share, according to a report in the Wall Street Journal newspaper.

Rejecting the offer, Cadbury also revised its growth targets, which promised shareholders an organic revenue growth of 5-7 percent annually, improved margins of 16-18 percent by 2013, a double digit growth in dividends per share from 2010 onwards and an 80-90 percent operating cash conversion from 2010.

“We believe our shareholders should have the opportunity to reap the full rewards of the investment that has already been made in creating a platform for future improved revenue growth, enhanced profitability and high cash returns,” said Carr.

“Kraft is trying to buy Cadbury on the cheap to provide much needed growth to their unattractive low-growth conglomerate business model. Don’t let Kraft steal your company with its derisory offer,” the statement added.