Cadbury launches last defence

Todd Stitzer, the chief executive of UK confectioner Cadbury, will launch a staunch final defence this week against predator Kraft Foods, the Toblerone maker.

With little hope of a so-called "white knight" investor riding in to protect Cadbury against Kraft's hostile £10.5bn bid, Mr Stitzer is expected to emphasise cost-cutting measures and strong recent sales in its 2009 trading figures.

The board hopes this will convince investors that Kraft has undervalued Cadbury so that they reject the offer and maintain nearly two centuries of independence.

Kraft's bid is worth about 767p a share, 11p below Cadbury's current share price. Most observers think that Kraft will have to up its offer to at least 800p and increase the cash element of the bid. Much of the offer involves giving Cadbury shareholders a stake in the combined group.

Under takeover rules, Kraft can improve its bid until 19 January. Shareholders must decide whether or not to accept it by 2 February.