Kraft is under pressure to make a formal takeover bid for Cadbury by November after the UKâ€™s Takeover Panel gave it less than six weeks to put an offer on the table or walk away.
The Takeover Panel said recently thatÂ it had set a deadline of November 9 for the US food group to come forward with a formal offer after the UK confectionery group approached it with a so-called â€œput up or shut upâ€ request last week.
Kraft said it had â€œnotedâ€ the decision of the Takeover Panel and understood the implications of the deadline.
Cadburyâ€™s Chairman, Roger Carr, said the confectionery company had not changed its view on Kraft, and stood by its rejection of the companyâ€™s $10.2bn ($16.3bn) indicative offer. He said: â€œThe board is confident in Cadburyâ€™s pure play strategy and growth prospectsâ€.Cadburyâ€™s shares closed 4p higher in London at 803p while Kraftâ€™s shares had slipped 13 cents to $25.89 in New York in Wednesday trading.
The timing of Kraftâ€™s and Cadburyâ€™s third-quarter results could influence when Kraft formalises its offer.Cadbury is scheduled to report third-quarter earnings on October 21, while Kraft is due to report in the first week of November.
The earnings announcements will allow both companies the opportunity to stress the strengths of their businesses.Kraft predicted in August that it â€œwill again grow both the top and bottom lines while expanding margins and improving market shareâ€ during its current fiscal year, as it enters â€œthe home stretchâ€ of efforts to transform its business under chief executive Irene Rosenfeld.
Meanwhile, Todd Stitzer, Cadbury chief executive, has been emphasising the companyâ€™s growth prospects in emerging markets.
Kraft is also closely watching foreign exchange rates. Recent weakness in sterling against the US dollar helps to strengthen Kraftâ€™s negotiating position as its share price weakens.Cadbury is not expected to release a formal defence document to shareholders until it receives a formal bid. If Kraft makes a formal offer, it will have 28 days to publish offer documents. If Cadburyâ€™s Board does not accept the offer, Cadbury would then have 14 days to publish a defense document.