DAIRY MILK maker Cadbury has labelled a £9.8bn hostile takeover bid launched yesterday by Kraft as derisory.

The US food company’s offer directly to Cadbury shareholders is actually worth less than the bid it tabled to the UK confectioner’s board in September.

Kraft, whose brands include Dairylea and Kenco coffee, offered the same terms again, 300p in cash and 0.2589 new Kraft shares for each Cadbury share.

But Kraft shares have dropped, sending the value of the offer down from 745p in September to 717p today.

Cadbury chairman Roger Carr said: “The board has emphatically rejected this derisory offer and has strengthened its resolve to ensure the true value of Cadbury is fully understood by all.”

He added: “Kraft’s offer does not come remotely close to reflecting the true value of our company.”

Kraft disappointed with weak third-quarter results last week – downgrading revenue guidance and hitting its shares.

Mr Carr said: ‘‘The repetition of a proposal, which is now of less value and lower than the current Cadbury share price, does not make it any more attractive.’’ Cadbury will contact shareholders shortly with a defence document setting out why it should remain as a standalone business.

Mr Carr added that a merger with Kraft represented the ‘‘unattractive prospect’’ of being absorbed into the US firm’s ‘‘low growth conglomerate business model’’.

Kraft, the world’s second biggest food company, acted yesterday before a 5pm ‘‘put up or shut up’’ deadline imposed by the City’s Takeover Panel.

It now has 28 days to send out its offer document to Cadbury shareholders.

The US firm said: ‘‘We believe that our proposal offers the best immediate and long-term value for Cadbury’s shareholders and for the company itself, compared with any other option currently available, including Cadbury remaining independent.’’ Kraft, which believed it could deliver cost savings of about £373m a year through a merger, has said it will remain ‘‘financially disciplined’’ over its approach for the confectioner, with its largest shareholder, the billionaire Warren Buffett, warning the company against overpaying for Cadbury.

Despite hopes of a bidding war involving rivals such as Hershey and Mars when its interest was first disclosed, Kraft also emphasised it was the only would-be buyer to publicly enter the fray.

Kraft said a merger would make the new company the number one chocolate and sweets firm and a strong number two in chewing gum with the addition of Cadbury’s Trident brand.