No.2 shareholder says bid undervalues Cadbury

19th Jan 2010 18:01

Cadbury's second biggest shareholder, Legal & General Investment Management, said Kraft Foods' 850p a share offer for the British chocolate and gum company fails to fully reflect the long term value of the company.Mark Burgess said on behalf of Legal & General Investment Management, which owns 5.1% in Cadbury: 'We believe the increased and final offer for Cadbury by Kraft Foods fails to fully reflect the long term value of the company.''We are disappointed management have recommended the offer for this iconic and unique British company, but are grateful for the constructive way they have engaged with us throughout the process,' he added.Cadbury looks set to fall into foreign hands after the board recommended acceptance of a revised offer this morning. Kraft's original offer was worth around 770p. The new terms are 500 pence in cash plus 0.1874 new Kraft Foods shares, giving an approximate value of 840 per Cadbury share. Cadbury shareholders will also be entitled to receive 10p per Cadbury share by way of a special dividend after the bid has become unconditional. Holders of Cadbury American Depositary Shares (ADSs) will receive £20 in cash plus 0.7496 new Kraft shares.