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December 8, 2009

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Cadbury response soon

CADBURY Plc said yesterday that it plans to publish its formal response to a 9.8 billion pound (US$16.3 billion) hostile takeover offer from Kraft Foods Inc on December 14.

Kraft, the maker of Oreo cookies, Nabisco crackers and its namesake cheese, took the offer straight to shareholders of the British candy company. In doing so, it bypassed the Cadbury board, which had already rejected an almost identical offer last month as "derisory."

London-based Cadbury noted that it is prohibited under United States securities law from making any further statement until it issues its formal response, which it said will be released alongside its previously scheduled trading update next Monday.

Kraft's move to take the offer, which includes 300 pence in cash and 0.2589 new Kraft shares for each Cadbury share, directly to shareholders started the clock on a series of regulatory deadlines to get the majority support it needs.

It may also flush out rival bids and gives the US company some wiggle room to increase its own offer should competition emerge.

Cadbury is an attractive acquisition. One of the world's largest confectionary companies, it has strong international reach with a key presence in emerging markets.

US chocolate maker The Hershey Co and Italy's Ferrero International SA have said they are considering an offer.


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