British confectioner Cadbury plc (NYSE:CBY) said Friday it considered a
complaint against its board filed by American shareholder Steward International Enhanced Value Index Fund as "entirely without merit."
Its statement didn't go into further detail, but if reports of the complaint's main thrust are correct, it's not hard to understand why the Birmingham, England, company would be unfazed by a complaint that its shareholders may be damaged by its response to Kraft Foods Inc.'s £10.0 billion ($15.8 billion) approach.
The reports said the complaint, filed in a New Jersey Court, asks the court to order Cadbury directors to respond in good faith to offers that are in the best interests of its shareholders and prevent them enacting takeover defenses.
It also names CEO Todd Stitzer and chairman Roger Carr (pictured), and says they and other board members stand to lose their "lavish compensation and positions of power" if Cadbury is sold.
It is true Cadbury rebuffed the initial cash and paper approach, which at the time valued its stock at 745 pence a shares -- although that has since fallen to about 720 pence. It is also true that Cadbury has made it clear it dislikes the idea of a tie-up with Kraft.
But the British company has hardly closed the door on further discussions. It has gone as far as demanding that the Takeover Panel give a put up or shut up deadline for Kraft to make a formal offer. And its share price, far from stagnating at its preoffer levels, has risen to over 800 pence as it allows shareholders to believe Kraft will come back with a better price.
Perhaps Kraft would oblige Cadbury's shareholders and do just that before the Takeover Panel's
Nov. 9 deadline. -
Jonathan BraudeHow would Kraft, Cadbury reorgs blend?Cadbury clears things up, somewhat
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