Cadbury to tell hostile Kraft to beat it, or pay more

Crunchie to Crème Egg chocolate maker, Cadbury, will tomorrow unveil its formal defence document, spelling out why the future is so creamy that it doesn't need Kraft Food's £10bn hostile takeover bid which has caused a furious response.

Chairman Roger Carr and chief executive Todd Stitzer are expected to say that trading is so upbeat that Kraft's offer undervalues the company and that its own valuation is much higher than the current bid.

The US cheesemaker's hostile cash-and-shares offer is currently worth 725p compared with the latest Cadbury share price of 787p. Analysts believe Kraft must pay at least 820p to 850p to win.

Mr Stitzer will claim his group is worth a lot more than Kraft's bid in his defence presentation. "Until Kraft is willing to pay more than 800p we cannot see how Cadbury's directors could even countenance opening discussions, and until 850p is offered cannot consider recommending a bid," said one analyst at Credit Suisse.

British and Irish workers at Cadbury will launch a "Keep Cadbury Independent" campaign next week at the group's main Bournville chocolate factory in Birmingham to fend off Kraft's bid and so avoid job losses and pay outs.