Kraft Foods Inc. (NYSE: KFT) took its 9.8 billion pound ($16.3 billion) hostile takeover offer for Cadbury PLC (NYSE: CBY) straight to shareholders of the British company on Friday, according to Associated Press.
The posting of the formal offer to investors starts the clock on a series of regulatory deadlines for responses from the Cadbury board and votes from shareholders and may flush out rival bids.
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The terms of the offer posted to investors were broadly unchanged from last month's indicative bid, which offered 300 pence in cash and 0.2589 new Kraft shares for each Cadbury share.
Cadbury, the maker of Dairy Milk chocolate and Trident and Dentyne gum, has already dismissed that price as "derisory" and now has two weeks to respond to the formal offer in a defense document.
Retaining the original offer gives Kraft, the maker of Oreo cookies, Nabisco crackers and its namesake cheese, some wiggle room to increase its bid should a rival suitor emerge.
U.S. chocolate company The Hershey Co. and Italy's Ferrero International SA have said they are considering an offer.
Analysts have also suggested that Nestle SA may be interested, although the Swiss company has made no comment.
Speculation of a bidding war has bumped up Cadbury's share price in recent weeks. The stock was trading at 800.5 pence, up 0.06 percent, on Friday. That's well above the 713 pence the formal offer values each Cadbury share at, based on Kraft's closing share price of $26.50 on Dec. 1.
Kraft CEO and chairman Irene B. Rosenfeld said the company's offer was a substantial premium to Cadbury's "unaffected" share price and stressed that the proposed deal "provides both immediate value certainty and meaningful longer-term upside potential."
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