The comments by Roger Carr, Cadbury's chairman, came in a formal defence document issued to its shareholders today designed to thwart a £9.8bn hostile bid from Kraft.

Alongside the verbal rebuttal, Cadbury also laid out a series of targets for the next four years which it hopes will be enough to persuade shareholders to knock back Kraft's existing offer. They are:

  • Organic revenue growth of 5pc to 7pc a year
  • Margins of 16pc to 18c by 2013
  • 80pc to 90pc operating cash conversion from 2010
  • Double digit growth in dividends per share from 2010

    Despite Cadbury's robust dismissal of Kraft's offer, the confectionary group's shares remain 39pc higher than when Kraft first revealed it had approached the company in September.

    • Researchers at Bernstein, said that the defence document and higher targets from the Board of Cadbury “make a strong argument as to why Cadbury shareholders should reject Kraft’s offer where it stands.” Andrew Wood, senior research analyst with Bernstein, said that the market analysts consider that Kraft’s arguments to support its bid of 4 December for Cadbury were not compelling and he said that Cadbury’s defence document today finally gives an appropriately aggressive view on potential for the business.

    Some analysts are looking for Hershey, the best-known name in the US confectionery business, to step in with an agreed offer for Cadbury.

    Cadbury and Hershey are understood to have had informal contacts but the US group does not relish the prospect of an expensive and possibly unsuccessful bid battle with Kraft. Hershey already has close links with Cadbury through a US distribution agreement but there are said to be differences between the group's management and its controlling trust about the merits of an offer.

    Todd Stitzer, the US chief executive of Cadbury, said today that the company's current performance remains on track to meet the expectations laid out in its last trading update in October.

    Yesterday,the BBC reported that Hershey has held talks with Cadbury. The report claimed Hershey was prepared to offer more cash than Kraft, which has tabled a bid including a proportion of shares in its business.

    Stitzer, who has reportedly publicly intimated that he would prefer a tie-up with Hershey, refused to be drawn on whether the Reese's maker had lodged any interest in Cadbury.

    However, he told reporters: "We have received expressions of interest from third parties. We have been approached by a number of people but we are not at liberty to speak about them specifically."

    Nevertheless, Stitzer insisted Cadbury could provide the best value to investors as an independent company. Cadbury's defence against Kraft's bid includes higher targets for sales growth, margins and dividends under the company's 'Vision into Action' programme, which the business launched in 2007 to improve revenues and profits.

    Kraft has until January 19 to improve its offer.

    Source: Telegraph.co.uk, just-food.com and confectionerynews.com