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A majority of shareholders of the British confectioner Cadbury Plc have rejected the initial hostile takeover bid from Kraft Foods Inc.
The American food major had made an over $10-billion acquisition bid, including both cash and stock, late last year. The Cadbury management had turned down the offer, saying it undervalued the company.
Kraft on Wednesday said that only 1.52 per cent of Cadbury shareholders have accepted its takeover offer as on January 5, the day when the US firm raised the cash component of its bid.
"Kraft Foods had received valid acceptances of the offer in respect of a total of 20,917,708 Cadbury shares (including those represented by Cadbury ADS), representing approximately 1.52 per cent of the existing issued share capital of Cadbury," the US firm said in a statement.
Kraft had offered about three pounds and 0.26 new Kraft stocks for every Cadbury share. The firm has time till January 19 to make the final offer for the British confectioner. According to the American company, the first closing date of the initial takeover offer was January 5.
The same has now been extended to February 2 after the company raised the cash part of the offer. Kraft has offered more cash for the takeover, after selling its North American pizza business for $3.7 billion to Nestle.
Even though Kraft has increased the cash component of the bid, hurdles remain, with the US company's top shareholder -- Warren Buffett-led Berkshire Hathaway -- opposing the move to issue new shares for the Cadbury deal.
Meanwhile, Berkshire has voted "no" on Kraft's proposal to authorise the issuance of up to 370 million shares to facilitate Cadbury acquisition. The Buffett-led conglomerate pointed out that the share- issuance proposal, if enacted, would give Kraft "a blank check allowing it to change its offer to Cadbury..."As per the latest proposal, Kraft would increase the cash component of its Cadbury offer by about 60 pence per Cadbury share to 360 pence or 240 pence per Cadbury ADS.