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Thu, Nov 05, 2009 - Page 10 News List

Kraft still wants Cadbury as profit for Q3 declines

AP , PORTLAND, OREGON

Kraft Foods Inc is still interested in acquiring Cadbury PLC but plans to deliver solid results with or without the British candy maker, Kraft said on Tuesday.

Kraft has little time left to make a firm offer for Cadbury.

British regulators set a Monday deadline for Kraft to make a formal bid or walk away for six months. The company announced in September that it had made a US$16.7 million initial proposal for Cadbury and was rebuffed.

Kraft officials would not disclose the price or timing of a potential offer, saying they were limited by regulations. But they hinted it might come soon, suggesting investors watch the company’s official filings.

If Kraft does acquire Cadbury, it would create an industry giant, combining the world’s second-largest food maker and one of the world’s largest confectioners.

Kraft CEO Irene Rosenfeld reiterated that the company would maintain a disciplined approach to the deal. Kraft is committed to maintaining its investment-grade credit rating and to paying investor dividends, she said.

“Let me underscore once again, with or without Cadbury, Kraft Foods is well-positioned to deliver top-tier performance,” she told investors.

Kraft reported on Tuesday that it earned US$824 million, or US$0.55 per share in its third quarter, down from US$1.36 billion, or US$0.91 per share, a year earlier, when its results included a US$0.57 gain from the Post Cereal business it has since sold.

The company’s said its profit margins and sales volume rose from previous quarters but lower retail prices on some products, such as cheese — which Kraft slashed when costs for key ingredients dropped — took a toll.

Revenue fell nearly 6 percent to US$9.8 billion, also hurt by the impact of the stronger dollar on its revenue earned abroad. Kraft increased its profit forecast for the full year from US$1.93 to US$1.97 per share.

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