US food giant Kraft stepped up its pursuit of UK rival Cadbury today by pledging to sweeten the cash part of its £10 billion takeover offer.
Kraft is selling its North American frozen pizza business to Nestle for 3.7 billion US dollars (£2.3 billion) in order to fund the revised proposal.
Meanwhile, Nestle confirmed it has no intention of making an offer for the UK firm. Speculation surrounding the KitKat maker's acquisition plans were fuelled yesterday when it raised more than £17 billion from the sale of its 52% stake in eye care group Alcon.
Kraft said it will give further details of its alternative takeover proposal by January 19, the last day under takeover rules that it is allowed to amend its offer.
The US firm also said it had extended today's deadline for Cadbury shareholders to accept its takeover offer to lunchtime on 2 February.
Kraft's original offer was for £3 per Cadbury share plus 0.26 new Kraft shares, although it now plans to increase the cash element by 60p a share in order to meet the concerns of Cadbury shareholders.
Kraft, which owns brands including Philadelphia cream cheese and Carte Noire coffee, said its own shareholders also expressed the desire for it to be more sparing in its use of Kraft shares as currency for the offer.
Its proposal originally valued Cadbury at £10.2 billion but a fall in the value of Kraft's shares and the weaker US dollar have dented the bid.
Kraft said it believed its shares were depressed by short-term factors which will end once uncertainty over the Cadbury offer is resolved.
Kraft's pizza sale includes the DiGiorno, Tombstone and Jack's brands in the United States, the Delissio brand in Canada and the California Pizza Kitchen trademark. The deal adds to Nestle's strong presence in the sector, which includes the brands Lean Cuisine, Buitoni, Hot Pockets and Lean Pockets.Reuse content