Goodnight Irene, goodnight, love from Roger

September 14, 2009

An early draft of Cadbury’s weekend response to the bid approach from Kraft has fallen into my hands.

Dear Irene B Rosenfeld

As you already know, we’ve already spattered your unsolicited takeover proposal with the corporate equivalent of Creme Egg goo, but I thought I’d follow up for the slower members of your board. We really don’t like the idea of being swallowed up by some amorphous conglomerate at a knockdown price simply because nobody wants your extruded Dairylea cheese-style sections anymore.

In case you hadn’t noticed, we’ve turned ourselves into the chocs’n’gum kings (well, princes, anyway, since Mars is the one we all have to beat). We’ve put those tooth-rotting fizzy sugary drinks back onto the shareholders (the performance of Dr Pepper Snapple since then rather shows how little we really knew about the business) and we’re now a pure play confectionery company.

We’re unique. We’re impossible to replicate. We’re close to being a national treasure, and I hardly need to remind you of the price that Nestle was forced to pay for Rowntree once the board had decided to play that card (twice the “undisturbed” price, if memory serves).

Then consider the quality of our management, the momentum of our business, the power of our brands, the strength of our market position and the spread of our global footprint. Golly, we’re close to perfect. You really need us far more than we need you!

And another thing: you’re not even offering real money – because you really can’t afford us. Why should our shareholders take shares in a company with a less focused business mix and historically lower growth? 

I think you can see where we’re coming from. Please don’t ask why  the UK shareholders have steadily sold out of their holdings in the national treasure, or that it took your approach for everyone to notice how wonderful we are, after eight years when the shares went nowhere. The future’s bright, but despite the quality of the management, etc etc, the record is only so-so.

This is why, given a few pennies more in real money, we could be persuaded to see the advantages of building a global food products powerhouse. I don’t want to put you off entirely.

As we say about our Creme Eggs, here today, goo tomorrow!

Yours confectionately

Roger Carr

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