Kraft Foods Inc. (NYSE: KFT) questioned the robust growth targets of Cadbury PLC (NYSE: CBY) as it stuck by its 9.8 billion pound ($16.3 billion) hostile takeover for the British chocolate company on Tuesday, according to Associated Press.
Kraft suggested it has no plans to raise the price of its cash and shares offer, despite a recent surge in Cadbury's share price that leaves the U.S. company's offer well below current trading levels.
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Kraft, based in Northfield, Illinois, said that Cadbury shareholders should consider how the company plans to meet raised profitability forecasts without more spending on restructuring and how sales can accelerate amid low food price inflation.
Cadbury, which also confirmed that it had received rival approaches from The Hershey Co. (NYSE: HSY) and Italy's Ferrero International SA, lifted organic revenue growth to 5-7 percent per year, up from a previously forecast 4-6 percent, and forecast improved margins of 16-18 percent by 2013, up from the "mid-teens."
The company also held out a carrot to investors of double digit growth in dividends per share from 2010 onwards.
Kraft has said it wants to get majority shareholder votes for its offer, which includes 300 pence in cash and 0.2589 new Kraft shares for each Cadbury share, by Jan. 5. However, it can extend that deadline to Feb. 2 under British takeover laws, and has until Jan. 19 to raise its bid.
Kraft's existing offer is currently worth 729 pence a share after a surge in Cadbury's share price thanks to speculation of a bidding war.
The stock was trading at 791 pence on Tuesday morning, down 0.5 percent.
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