Cadbury rejects Kraft takeover bid

US food giant Kraft Foods $19.6 billion bid for rival company Cadbury has been rejected by the British confectionary powerhouse.

Cadbury claims the bid undervalued the company and its prospects. Kraft must now move to sweeten the deal and has vowed it would continue to work towards a recommendation from Cadbury for its bid, despite the rejection.

Cadbury’s share price surged on the news and ended the day with a gain of 37.85 percent at 783 pence. Cadbury said in a statement that it was confident in its standalone strategy, boasting a strong brand, category, geographic scope and continued success of its cost savings plan.

Analysts said that a much larger cash element would be needed for the deal to succeed.

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