London: British confectionery major Cadbury has launched a "trenchant" attack on its suitor Kraft Foods and has said that the American company is being run by biggest shareholder Warren Buffet, says a media report.
"It was hugely embarrassing for Kraft to be reprimanded in public. It is very evident the real boss of Kraft lives in Omaha," Cadbury Chairman Roger Carr told The Sunday Times. Buffett, last week, publicly warned Kraft not to overpay for Cadbury.
Carr further said: "Buffett’s comments impose pretty severe constraints on Kraft to offer something that materially favours its own shareholders, at the expense of Cadbury shareholders. But our investors will not allow this business to be stolen."
Kraft has not made any final decision about whether to raise its existing cash and shares offer, which values Cadbury at about 769 pence a share. It has until January 19 to make its final offer.
If, as expected, Kraft does raise its bid to 800 – 820 pence a share, it will need to secure the support of its own shareholders, including Buffett, the Sunday Times said.
The newspaper further said that "this is Carr's latest warning as the hostile bid battle moves to a finale. He also insisted Cadbury's loyal shareholders would not allow the business to be sold on the cheap.
Analysts expect Cadbury to reject any offer worth less than 850 pence a share. The confectionery group's (Cadbury) shares closed on Friday at 778 pence, valuing the group at 10.7 billion pound.
"Cadbury's shares could slide back to somewhere between 600 pence and 700 pence if Kraft's offer fails," the report said quoting analysts.
Meanwhile, analysts have warned that even if Cadbury does fend off Kraft's bid, it could be hamstrung by the "winner's curse" of having to meet its own more challenging performance targets.
Last week Carr had said : "I would rather have a winner's curse than seller's remorse. The Cadbury management know they will be judged on their performance — not promises. They are well placed to achieve what we believe are stretching targets — and that is not a curse, it is a responsibility to deliver for shareholders."
PTI
First Published: Sunday, January 10, 2010, 17:56