Cadbury's Derisory Opinion of Kraft

Were you the Kraft CEO, would you stick with your offer for Cadbury? Cadbury's chief has made it quite clear through his repeated use of the word "derisory" that he doesn't think much of Kraft, its products, or its shareholders. Or its offer, which even Warren Buffett was quoted as saying was "quite full." Cadbury would like Kraft to overpay, and insists that unless Kraft does indeed overpay, that the offer is an insult.

Kraft shareholders have been insulted. Cadbury clearly thinks that they are stupid enough to overpay for the acquisition, and in fact that unless the Kraft side is stupid, that there should be no deal. There is even a moral overtone to the objections, as though Kraft had violated one of the ten commandments by making a bid for Cadbury that did not contain extra fluff.

Now that Hershey's trust has decided to discard its highly regarded conservative stance and possibly make an offer for Cadbury, it is said (by the New York Times today) that Cadbury would be leaning toward a Hershey offer. It all makes sense now: Cadbury is willing to fall in love and marry the first company that loses its rationality and becomes hyperemotional. Obviously, Kraft is not emotional, as it made a rational offer. No wonder Cadbury feels so betrayed, no, disparaged, jilted, so unappreciated and unloved! Cadbury doesn't want a merger or a partnership. It wants to be courted by a suitor that proves first that it can't think straight for all its lust to consummate a deal with Cadbury, and only Cadbury...

Kraft can do without a partner that wants the chocolate business to be just like a dirty romance novel. Walking away is the best option for KFT.