Cadbury rejects Kraft's 'derisory' bid



LONDON (CNN) -- Kraft Foods made a fresh bid for British candy company Cadbury Tuesday shortly after announcing the sale of its U.S. pizza business to Nestle.

Illinois-based Kraft said it would use the proceeds of the pizza sale to increase the cash element of its Cadbury offer. Under Kraft's offer of a partial cash alternative, Cadbury shareholders could receive cash as well as Kraft shares if they accept Kraft's deal.

"Kraft Foods is doing this because of the desire expressed by some Cadbury security holders to have a greater proportion of the offer in cash," Kraft said in a statement.

The maker of Jell-O, Cool Whip, Oreo cookies and Kraft Macaroni & Cheese also extended the Cadbury offer to February 2. The original bid had expired Tuesday.

Cadbury, which rejected Kraft's previous two deals, rejected the new offer Tuesday.

"Kraft has once again missed the point," a Cadbury spokesman told CNN. "Despite this tinkering, the Kraft offer remains unchanged and derisory, with less than half the consideration in cash."

There had been rumors that Swiss firm Nestle, which already has a chocolate and confectionery unit, would step in and make its own offer for Cadbury. But Nestle put an end to those rumors Tuesday by issuing a statement saying it had no intention to make an offer for the British company.

Instead, Nestle said it had bought Kraft's frozen pizza business in the United States and Canada for $3.7 billion. The unit includes brands like DiGiorno, Tombstone, and California Pizza Kitchen.

"The acquisition brings leadership in the frozen pizza category, where Nestle only had a minor presence until now, and builds on Nestle's existing pizza know-how and operations in Europe," Nestle said in a statement Tuesday. "It is a natural fit with Nestle's focus on delivering convenient, premium, wholesome and nutritious frozen food for consumers around the world."

Nestle already had a presence in American frozen food aisles with ready-meal brands like Stouffer's, Lean Cuisine, and Hot Pockets.

The proceeds from the sale allow Kraft to offer more cash to Cadbury shareholders -- 60 pence (96 cents) per share, Kraft said. Kraft originally offered Cadbury shareholders 300 pence ($4.81) and 0.26 Kraft shares for each share of Cadbury they own.

Kraft said it will announce more detailed terms by January 19. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 16,982.59 22.02 0.13%
Nasdaq 4,444.91 -4.65 -0.10%
S&P 500 1,978.91 0.57 0.03%
Treasuries 2.49 0.02 0.89%
Data as of 5:36am ET
Company Price Change % Change
Apple Inc 99.02 1.35 1.38%
Facebook Inc 74.92 -0.27 -0.36%
Bank of America Corp... 15.50 -0.09 -0.58%
Dollar Tree Inc 54.87 -0.08 -0.15%
Family Dollar Stores... 75.74 15.08 24.86%
Data as of Jul 28

Sections

Herbalife shares tumble after the maker of nutritional supplements reports earnings that fall short of analysts' estimates. More

New annual report from U.S. government shows the long-term prognosis for Medicare has improved thanks to slower health spending, while the outlook for Social Security remains unchanged. More

Online dating site OkCupid found its users were more likely to have conversations when it told them they were more compatible than in reality. More

Actor-founded This Bar Saves Lives had Hollywood connections, but learned Start-Up 101 the hard way. More

Steve Mason, a pastor from California, inherited more than $100,000 in student loan debt when his 27-year-old daughter died suddenly in 2009. With interest and late penalties, the debt has since ballooned to $200,000. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.