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 Just in case the executives over at Kraft Foods Inc. (NYSE:KFT) didn't quite understand that the $16.7 billion offer to Cadbury plc (NYSE:CBY) was rejected the first time around, Cadbury chairman Richard Carr went ahead and wrote an open letter to Kraft CEO Irene Rosenfeld spelling out how unattractive the offer is for the confectioner. The letter, however, instead left many wondering if Cadbury is putting fire on the stove to get a tastier offer from Kraft, or even rivals the Hershey Co. (NYSE:HSY) or Nestle SA. In the letter Carr says the valuation was too low and the company wants to be independent: "Under your proposal, Cadbury would be absorbed into Kraft's low growth, conglomerate business model, an unappealing prospect which compares to our strategy to be a pure play confectionary company." Marco Gulpers of ING Financial Markets in Amsterdam told Forbes, "Some of the wording Cadbury is using can been seen as quite hostile towards a possible merger, but it is also a way to try to get Kraft to sweeten the deal. What shareholders will want now is for Cadbury to negotiate a better deal." The original deal only values Cadbury at 13 times Ebitda, which is M&M's compared with the Mars Inc.-Wm. Wrigley Jr. Co. deal, which was done at 19 times Ebitda. However, the value of Kraft's offer has slipped to £9.7 billion ($14.2 billion) by Monday, according to The Deal's Laura Board (The Deal Pipeline subscribers can read the full story here.). So far a lot of speculation has surfaced, but no other deals are on the table. And as The Deal magazine story entitled Sweet tooth points out, the odds are against Cadbury because a,"large proportion of Cadbury's shareholders are U.S. institutions, and they and their British counterparts will be as aggressive as any in their search for the best price." So perhaps this is the way Cadbury's management hopes to up the offer? Or perhaps management is warning that they would go to lengths to stave off Kraft if it did up the offer? - Maria Woehr Also see: Sweet tooth Could Cadbury gobble up Hershey? Campbell, Kraft contrast in emerging market strategy Kraft cuts costs by slicing suppliers thin
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