A £9.8 billion hostile takeover bid from US food giant Kraft was labelled "derisory" by Dairy Milk maker Cadbury today.
Kraft - the company behind brands including Dairylea and Kenco coffee - appealed directly to Cadbury's investors after its initial approach was rejected by the board in September.
But it refused to improve the terms of its cash-and-shares offer, which is now lower than two months ago due to falls in the Kraft share price.
Cadbury chairman Roger Carr said: "The board has emphatically rejected this derisory offer and has strengthened its resolve to ensure the true value of Cadbury is fully understood by all."
He added: "Kraft's offer does not come remotely close to reflecting the true value of our company."
Kraft disappointed with weak third-quarter results last week - downgrading revenue guidance and hitting its shares. This has sent the value of the firm's offer down from 745p in September to 717p today.
Mr Carr added: "The repetition of a proposal which is now of less value and lower than the current Cadbury share price does not make it any more attractive."
Cadbury will contact shareholders shortly with a defence document setting out why it should remain as a standalone business.
Mr Carr added that a merger with Kraft represented the "unattractive prospect" of being absorbed into the US firm's "low growth conglomerate business model".
Kraft - the world's second biggest food company - dates back to 1903 and its other well-known brands include Oreos biscuits and Toblerone chocolate.
The company was acting before a 5pm "put up or shut up" deadline imposed by the City's Takeover Panel. It now has 28 days to send out its offer document to Cadbury shareholders.
The US firm said: "We believe that our proposal offers the best immediate and long-term value for Cadbury's shareholders and for the company itself compared with any other option currently available, including Cadbury remaining independent."
Kraft believes it makes a "unique fit" with Cadbury and can deliver cost savings of about 625 million US dollars (£373 million) a year through a merger.
Despite hopes of a bidding war involving the likes of rivals such as Hershey and Mars when its interest was first disclosed, Kraft also emphasised it was the only would-be buyer to publicly enter the fray.
Kraft wants a tie-up with Cadbury to create a "global powerhouse" with dominant brands of snacks, confectionery and quick meals.
The firm said a merger would make the new company the number one chocolate and sweets firm and a "strong number two" in chewing gum with the addition of Cadbury's Trident brand.
Kraft has said it will remain "financially disciplined" over its approach for Cadbury. Its largest shareholder is billionaire investor Warren Buffett, who has warned the company against overpaying for Cadbury.
In September it said it hoped to keep open Cadbury's Somerdale facility near Bristol, which is currently scheduled to close, and invest in the firm's Bournville factory near Birmingham.
Cadbury began life as a grocer's shop in Birmingham's fashionable Bull Street in 1824. Dairy Milk is the UK's top-selling chocolate bar and in total more than 250 million are sold every year in 33 countries.
Although the company has 50,000 private shareholders, Cadbury's largest investor is US investment management firm Franklin Resources with just over 8 per cent.
Legal & General, which owns 5.2 per cent of the firm, came out against Kraft's original offer in September, saying it "materially undervalued" Cadbury.
Kraft will have 60 days from the posting of its offer document to win support for its bid unless a competitor forces a battle for control.