Kraft Foods’ $18.9 billion takeover offer wins backing from Cadbury board

Kraft Foods, Cadbury agree $18.9 billion deal

LONDON — Kraft Foods Inc. says the board of Cadbury PLC has accepted and recommended to shareholders an improved takeover offer worth $18.9 billion.

Kraft said in a statement Tuesday that Cadbury’s board had unanimously endorsed the offer worth 840 pence per share, somewhat less than some analysts believe the British chocolate company is worth.

The revised offer is for 500 pence cash and 0.1874 new Kraft shares for each Cadbury share.

Kraft’s previous offer of 10.5 billion pounds ($17.1 billion) valued Cadbury at about 770 pence.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

LONDON (AP) — Kraft Foods and British chocolate and gum maker Cadbury are close to an agreed takeover deal and will announce details later in the day, the two companies said Tuesday.

Cadbury shares surged 3 percent to 832 pence in early trading on the London Stock Exchange on the news.

“The boards of Kraft Foods Inc. and Cadbury PLC confirm that they are finalizing the terms of a recommended offer for Cadbury PLC. A further announcement will be made shortly,” they said in an announcement to the exchange.

Tuesday was the deadline for Kraft to raise its offer for Cadbury, maker of Creme Eggs and Dentyne gum.

The British company had fought hard against Kraft’s initial offer announced in December, dimissing it as a “derisory” bid from an unfocused, underperforming conglomerate.

Cadbury shares moved above 800 pence on Monday, indicating the market was looking for Kraft to jump to that level or higher by its deadline on Tuesday. Kraft’s previous offer of 10.5 billion pounds ($17.1 billion) valued Cadbury at about 770 pence.

Kraft may still have a battle winning endorsement from Cadbury shareholders, and The Hershey Co. has until Saturday to decide whether it wants to make a rival bid.

David Cumming, head of U.K. equities at Cadbury shareholder Standard Life, said Monday that Kraft needed to aim above 900 pence to secure support from long-term shareholders.

Kraft, based in Northfield, Illinois, had raised the cash portion of its offer earlier this month after selling its North America pizza business to Nestle for $3.7 billion.