ROGER CARR, the Cadbury chairman, will issue a caustic rebuttal to Kraft, the American food group, when it tables a £10 billion hostile bid for the Dairy Milk maker tomorrow.

Carr is expected to say that Kraft has turned from a “low growth conglomerate” into a “no growth conglomerate” after weak third-quarter results from the company last week, and that there remains no appeal in linking up with it.

He is also likely to point out that Kraft has missed market expectations with four of its past five quarterly figures and reiterate that, while Kraft may need Cadbury, Cadbury certainly does not need Kraft.

The confectionery giant believes that it has the support of its biggest shareholders to show “steel” and “resolve” in the face of any hostile bid that undervalues the company.

But this weekend Franklin Resources, Cadbury’s biggest shareholder, revealed that it targeted Cadbury as a takeover candidate before the Kraft approach and had an acceptable price in mind.

Analysts believe that any offer short of 850p a share, given Cadbury’s buoyant trading update last month and its growth potential in emerging overseas markets such as Brazil, will be insufficient.

Kraft was putting the finishing touches to its takeover bid this weekend ahead of a deadline set by the Takeover Panel to make a firm offer or walk away by 5pm tomorrow.

It is expected that Kraft will formalise its existing cash-and-shares offer for Cadbury, worth £9.8 billion, or 720p a share.

Analysts said that Kraft probably believes Cadbury will reject any offer short of a substantial premium to its initial proposal so there is little point in raising its bid price at this stage. Such a strategy would not preclude Kraft from raising its offer later.

So far, the American group has played a long game, waiting for the froth to come out of the market. Initial speculation about counterbidders has died down, with Unilever, regarded as one of the most credible rivals, publicly ruling itself out last week.

If Kraft tables its existing proposal it will be hoping that Cadbury’s shareholders, who have so far held firm, will throw in the towel when it is clear there is no counter bid to choose from.

Discussions in the week ahead are expected to centre on how far Cadbury’s share price would fall if the Kraft bid fails and how long it would be before it bounces back to the bid price.

If Kraft does decide to raise its offer tomorrow, it is expected to be only a small increase. Any significant change in the cash and shares components is thought unlikely given Cadbury’s existing debts. Shares in Cadbury closed at 760Åp on Friday.

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