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NEW YORK - Kraft Foods has gone hostile in its bid to buy Cadbury but didn't sweeten its first bid, drawing an immediate rejection from the British candy maker.
Taking the same offer directly to Cadbury shareholders likely means that Kraft is betting that no competing bids will emerge for the maker of Dairy Milk and Creme Eggs.
Kraft made the $16.4 billion offer just hours before a deadline imposed by Britain's takeover law required that the company make a formal offer or back off for six months. Kraft has 28 days to file a prospectus, which will then trigger more deadlines that could last months.
The maker of Oreo cookies, Oscar Mayer meats and Nabisco crackers maintained its offer of about $5.10 in cash and 0.2589 Kraft shares for every share of Cadbury. But the deal's value fell from its original $16.7 billion because Kraft's shares have fallen since the first offer was announced in September.
Cadbury Chairman Roger Carr offered a blunt assessment of the bid: "Kraft's offer does not come remotely close to reflecting the true value of our company."
Now it's now up to Cadbury's shareholders to decide.
Kraft is the largest food company in the U.S. and No. 2 worldwide to Nestle, which would keep its No. 1 position even if Kraft adds Cadbury.
Kraft also faces a band of vocal supporters of the British company's long-held independence.
Felicity Loudon, the granddaughter of former Cadbury Brothers' managing director Egbert Cadbury, has also been an outspoken critic of any deal. She said she was "particularly saddened by the possibility of one of the last remaining British icons disappearing into an American plastic cheese company."
Kraft shares fell 32 cents to $26.46 in afternoon.
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