Cadbury investors to meet Kraft boss

TWO leading Scottish institutional investors are due to meet Kraft Foods chief executive Irene Rosenfeld over the next couple of days to discuss the American group's hostile £10.5 billion bid for Cadbury.

The attitude of Edinburgh-based Scottish Widows Investment Partnership and Standard Life Investments contrasts with at least two other institutional investors in Cadbury, who are understood to have refused to meet Rosenfeld.

It is said those other investors believe there is little point in meeting the Kraft chief executive unless she is prepared to contemplate raising the US firm's offer.

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It is believed SWIP is due to meet Rosenfeld today while SLI will meet her tomorrow.

Both institutions, which own less than 1 per cent of Cadbury, declined to comment.

One fund manager said: "Companies do their talking partly by picking their phone up and partly by their actions. At the moment, Kraft don't seem to have anything very interesting to say to us."

Cadbury has been fighting Kraft's cash-and-shares bid – currently worth 762p a share – since early September, with investors and analysts saying a winning bid needs to be 800p or above.

Cadbury has been allowed by the Takeover Panel to present a regional breakdown of its performance after the market closes tomorrow.

Kraft then has until next Tuesday to decide whether to raise its bid, with Cadbury shareholders then having until 2 February to make up their minds.

In its defence document, the Dairy Milk and Trident chewing gum maker said Kraft's offer valued it lower than any comparable deal in the sector.

Cadbury group chairman Roger Carr said: "Today, the view of the Kraft offer is pretty universal, and derisory is not an unreasonable view."

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Cadbury said its 2009 underlying sales rose 5 per cent with the second half accelerating to 6 per cent. It achieved an operating margin of 13.5 per cent against a previous forecast of 13.3 per cent and said its 2009 dividend would rise 10 per cent.

"Our performance in 2009 was outstanding. We generated good revenue growth despite the weakest economic conditions in 80 years," Cadbury's chief executive, Todd Stitzer, said.

Stitzer and Carr have questioned the ability of Rosenfeld to raise Kraft's bid after the group's top shareholder, the highly influential investor Warren Buffett, warned the company last week not to overpay and issue too many new Kraft shares.