CORRECT: AT A GLANCE: Cadbury Accepts Raised Bid From Kraft

Cadbury PLC (CBY) Tuesday accepted an GBP11.9 billion takeover offer from Kraft Foods Inc. (KFT) of the U.S., a deal that ends a four-month acrimonious battle and nearly 200-years of independence for the U.K.'s largest confectionery company.

THE DEAL:

Kraft has agreed to pay 500 pence in cash for each Cadbury share as well as 0.1874 new Kraft shares for each Cadbury share, up from its original offer of 300 pence in cash and 0.2589 new Kraft shares. The original hostile bid had been rejected by Cadbury for being "derisory" and had been criticized by some shareholders for offering too little in cash.

The new offer values Cadbury at GBP11.9 billion, compared with the original value of GBP10.2 billion.

THE RATIONALE:

Kraft says the takeover, creating a global confectionary giant with more than 40 confectionary brands and annual sales above $100 million. will result in "meaningful" cost savings and revenue synergies.

The U.S. company also says the deal gives Cadbury scale, an improved delivery infrastructure, and a leading position in developing markets including Brazil, Russia, India, China and Mexico.

WHAT NEXT:

A rival bidder could emerge for Cadbury, although this now seems unlikely. People close to U.S. chocolate maker Hershey Co. (HSY), which had been mulling a counterbid for Cadbury, told the Wall Street Journal Monday that Hershey would likely drop out of the running if Cadbury and Kraft agreed a deal.

Cadbury has also agreed to pay a break fee of GBP117.7 million if it ever decides to recommend a competing offer--lessening the chance of a successful Hershey bid.

The U.K. takeover authorities have set a Jan. 25 deadline for Hershey, or Italian chocolate maker Ferrero--which had also been considering its options but is believed to have dropped out--to make final offers.

THE BACKGROUND:

Kraft first went public with an informal cash-and-stock bid for Cadbury on Sep. 7, but Cadbury has consistently rejected its approach, saying the takeover offer was "derisory" and Cadbury's shareholders shouldn't swap the company's growth prospects for Kraft's "low-growth, conglomerate" model.

Carr had also been critical of Kraft's management, saying they had "a long track record for over-praising and under delivering."

It's unclear what persuaded Carr and Cadbury Chief Executive Todd Stitzer to turn to recommend Kraft's new offer, but the U.S. company went a long way to meeting the demands of shareholders, who had requested a higher offer and more cash.

Kraft's offer should appease Kraft's largest shareholder Warren Buffett, who warned the company earlier this month against issuing too much new Kraft stock to pay for a deal.

WHAT THEY SAID:

"We are supportive of the (Cadbury) management's decision although the achieved price is slightly light of our stated target." - David Cumming, head of UK Equities at Standard Life Investments, a Cadbury shareholder with less than 1% of the stock.

"We believe the offer represents good value for Cadbury shareholders and are pleased with the commitment that Kraft Foods has made to our heritage, values and people throughout the world. We will now work with the Kraft Foods' management to ensure the continued success and growth of the business for the benefit of our customers, consumers and employees." - Cadbury Chairman Roger Carr

"For Kraft Foods shareholders (the deal) transforms the portfolio, accelerates long-term growth and delivers highly attractive returns, while maintaining financial discipline." - Kraft Foods Chairman and CEO Irene Rosenfeld.

-By Michael Carolan and Steve McGrath, Dow Jones Newswires; 44-20-7842-9284; steve.mcgrath@dowjones.com

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