Kraft, the American food giant, has taken its £9.8 billion bid for Cadbury straight to shareholders.
The terms are broadly unchanged from last month’s bid, which offered 300p and 0.2589 Kraft shares for each Cadbury share.
Several big shareholders have already indicated that they believe Kraft’s bid undervalues the company.
Investors are hoping for an approach from one of Cadbury’s rumoured alternative suitors, which include Hershey, the maker of Reece’s Peanut Butter Cups, and Nestl?, the maker of Kit Kat, to push up the price Kraft is offering.
Based on Kraft’s share price at December 1, the offer values each Cadbury share at 713p.
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Shareholders have until January 5 to respond to the offer. It is understood some investors do not want Cadbury to engage with Kraft without an offer of 850p a share or more.
Cadbury has a fortnight to prepare its defence to the bid. It is understood that it will focus on the company’s potential for long-term growth, particularly in emerging markets. It could announce its defence at a trading update due on December 15.
Cadbury’s share price rose 0.2 per cent to 801.5p today, despite falling earlier in the day.
Kraft has already lined up $9 billion of funding from banks, including Royal Bank of Scotland, for the bid.
Irene Rosenfeld, chief executive and chairman of Kraft Foods, said: “We remain confident that the unique combination of Kraft Foods and Cadbury would create a significant growth opportunity for both businesses. That’s why we believe this offer is in the best interest of both companies’ shareholders.
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“Our offer is fully financed, represents a substantial premium to Cadbury’s unaffected share price and provides both immediate value certainty and meaningful longer-term upside potential.”