frequently asked questions

1. What does the offer for Cadbury plc from Kraft Foods refer to?

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Kraft Foods Inc., a US-based food company, made an unsolicited offer to buy Cadbury plc on 9 November 2009 and sent its formal offer to Cadbury shareholders on 4 December 2009. Kraft’s formal offer document and the formal response documents from Cadbury can be found on this website.

2. What is the Cadbury Board’s formal response to the offer from Kraft Foods?

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The Cadbury Board has reviewed the offer and published two formal response documents. The first of these, titled ‘Higher performance, higher value’, was published and sent to shareholders on 14 December 2009. The second response document published on 12 January 2010 and titled ‘Further reasons to reject Kraft’s offer’ includes additional analysis in respect of the offer as well as 2009 performance commentary to help shareholders in making their decision. This document is due to be updated with further details of 2009 performance on 14 January 2010. The formal response documents state that your Board, which has been so advised by Goldman Sachs International, Morgan Stanley & Co. Limited and UBS Investment Bank ("the Advisers"), believes that Kraft's offer substantially undervalues Cadbury. In providing their financial advice to the Board, the Advisers have taken into account the Board's commercial assessment. Accordingly, the Board unanimously recommends that you should take no action in relation to the offer and do not sign any document which Kraft or its advisers send to you. Your Directors will not be accepting Kraft's offer in respect of their own beneficial shareholdings.

3. Why did Cadbury publish the second document titled ‘Further reasons to reject Kraft’s offer’?

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12 January 2010 would be the latest date on which Cadbury can disclose material new information according to the timetable set by the UK Takeover Code. Hence, the document posted on our website on 12 January presents new information, outlining further analysis on the offer and setting out headline information on the expected full year 2009 performance as available at this date. However, the Panel gave Cadbury an extension until 7am on 15 January 2010 so that the Company could revise its document in order to provide shareholders with the more detailed estimated trading results for 2009 that would be available then. The revised document to be published on 14 January will include more detailed 2009 financial information, albeit unaudited at this stage.

4. Why has the Board of Cadbury rejected the offer?

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The reasons for the Board’s rejection of the offer are set out in Cadbury’s formal response documents of 14 December 2009 and 12/14 January 2010. Both documents are available on this website.

5. What are the process next steps from here?

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Kraft has until Tuesday 19 January (Day 46) to revise its offer and has extended the deadline for shareholder acceptances to 2 February (Day 60) If another formal offer is tabled by a new offeror, this would usually have the effect of re-setting Kraft’s offer timetable so that Kraft and the new offeror are bound by the timetable for the new offeror. Kraft and any new offeror would therefore have further time to revise their offers.

6. How can I get copies of the formal response documents published by Cadbury?

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The response documents from Cadbury, published on 14 December 2009 and on 14 January 2010, are available on this website.

7. How can I get a copy of the Kraft offer?

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The formal offer made by Kraft on December 4, along with other documents and press releases published by Cadbury and Kraft to date in relation to the offer, can be found on this website.

8. What is Kraft offering for my Cadbury Shares?

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The offer is for 300p (£3) cash and 0.2589 Kraft shares per Cadbury share. See also question “Has Kraft changed its offer from that in the offer document?”.

9. What is Kraft offering for my Cadbury ADRs?

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The offer is for 1,200p (£12) cash and 1.0356 Kraft shares per Cadbury ADR. See also question “Has Kraft changed its offer from that in the offer document?”.

10. Has Kraft changed its offer from that in the offer document?

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No, Kraft has not changed the price of its offer but announced on 5 January that it will give to shareholders who accept the offer and elect to receive the “Partial Cash Alternative” an estimated 60p per share (240p per ADS) in cash instead of a portion of the Kraft shares that would have otherwise been part of the offer consideration. The exact terms of the alternative have not yet been made clear.

11. Can Kraft increase its offer price?

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Under UK Takeover Code rules, Kraft is able to revise its offer until 19 January 2010, Day 46 of the offer timetable. Kraft can increase but not decrease its offer price. After this date, Kraft will not normally be able to revise its offer terms unless, for example, a new offer is tabled for Cadbury by another offeror. If another formal offer is tabled by a new offeror, this would usually have the effect of re-setting Kraft’s offer timetable so that Kraft and the new offeror are bound by the timetable for the new offeror. Kraft and the new offeror would therefore have further time to revise their offers.

12. Where are Kraft shares listed and traded?

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They are listed and traded on the New York Stock Exchange.

13. If I want to reject the offer, what should I do?

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If you want to reject the offer you should take no action and you should not authorise anyone to take any action in relation to the offer on your behalf.

14. In the package that I received from Kraft there is an acceptance form. What do I do with this?

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This is a form to accept the Kraft offer and should be filled in only if you wish to accept the Kraft offer. If you do not want to accept the Kraft offer then do not fill in the form. As set out in the formal response documents, your Board, which has been so advised by Goldman Sachs International, Morgan Stanley & Co. Limited and UBS Investment Bank ("the Advisers"), believes that Kraft's offer substantially undervalues Cadbury. In providing their financial advice to the Board, the Advisers have taken into account the Board's commercial assessment. Accordingly, the Board unanimously recommends that you should take no action in relation to the offer and do not sign any document which Kraft or its advisers send to you. Your Directors will not be accepting Kraft's offer in respect of their own beneficial shareholdings. As this is a financial decision we recommend that if you are in any doubt about what action to take, please contact your financial advisor.

15. I have already accepted the Kraft offer but I have changed my mind and would like to withdraw my acceptance. How do I do this?

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If your shares are held in certificated form and you have completed an acceptance form you have received from Kraft, you can withdraw your acceptance at any time up until 1.00 p.m. on 2 February 2010 by writing to the following address: Computershare Investor Services PLC 2nd Floor, Vintners Place 68 Upper Thames Street London EC4V 3BJ. Please see paragraph 4 of Part B of Appendix I of Kraft’s offer document, available on this website, for further detail on how to withdraw your acceptance and for withdrawal instructions for persons holding shares in uncertificated form and persons holding ADRs. If your shares are held through a bank/broker then please contact your account representative to get instructions as to how you can withdraw your acceptance.

16. Do I have to tender or to accept the offer in relation to my shares?

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No. Each shareholder is entitled to make their own decision.

17. Do I have to follow the Board’s recommendation to reject the offer?

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No. Each shareholder is entitled to make their own decision.

18. Can I be forced to sell my shares to Kraft or to accept the offer?

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You can only be forced to sell your shares if an offeror acquires 90% or more of the shares in Cadbury and chooses to exercise its right under UK law to purchase the remainder.

19. What will happen if I do nothing?

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You will not accept Kraft’s offer and you will continue to own your Cadbury shares, however, this is a financial decision and therefore you are encouraged to seek advice from your financial advisor. You can only be forced to sell your shares if an offeror acquires 90% or more of the shares in Cadbury and chooses to exercise its right under UK law to purchase the remainder.

20. What would happen if another company put an offer in?

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Cadbury’s Board is legally obliged to review all offers and proposals. If there is a proposal which merits disclosure, the Board will communicate appropriately.

21. Who can I call if I have more questions?

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Please refer to the Contacts section of this website.

Frequently Asked Questions added on 28th January 2010

1. Kraft Foods has reduced the minimum Acceptance Condition from 90% to 50% plus one share. Is it possible that Cadbury Shares continue trading because Kraft Foods cannot squeeze out the minorities?

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Under UK Listing Rules, to delist Cadbury from the London Stock Exchange, the prior approval from a majority of not less than 75% of Cadbury Shareholders is required. Kraft Foods has indicated that it will commence the delisting process once it reaches the 75% threshold, or otherwise, on the date it first issues its compulsory acquisition notice after having reaching the 90% squeeze-out threshold. Until such time, Cadbury Shares will continue to trade on the London Stock Exchange.

2. Kraft Foods has reduced the minimum Acceptance Condition from 90% to 50% plus one Cadbury Share. Can Kraft Foods declare the Final Offer unconditional before 2 February 2010?

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Information on the Acceptance Condition is set out in Part A of Appendix I (p27) of Kraft’s Final Offer document. Kraft’s Final Offer document provides that - “If the Acceptance Condition is satisfied and all other Conditions have been satisfied, fulfilled or, to the extent permitted, waived, the Offer will be declared wholly unconditional at that time and withdrawal rights will terminate (except in limited circumstances). Cadbury Securityholders who have already accepted the Offer, but whose willingness to accept the Offer is affected by the reduction of the Acceptance Condition, may wish to consider withdrawing their acceptances with respect to such Cadbury Shares promptly.”

3. If I do not sell my Cadbury Shares, when can Kraft Foods compulsory acquire my Cadbury Shares? When would I receive the consideration for my Cadbury Shares?

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Information on compulsory acquisition is set out in paragraph 3 of Section C of Part 2 (page 25) of Kraft’s Final Offer document. At the moment, Kraft’s Final Offer document simply provides that - “If the Final Offer becomes or is declared wholly unconditional, it is the intention of Kraft Foods, assuming it becomes so entitled, to acquire compulsorily any outstanding Cadbury Shares (including any Cadbury Shares represented by Cadbury ADSs) pursuant to the provisions of the [Companies Act 2006].” Further details of the compulsory acquisition process would need to be communicated by Kraft Foods to Cadbury Shareholders at the relevant time.

4. Is there any more information on the Special Dividend than that available in Kraft’s revised offer document?

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Details on the Special Dividend were published by Cadbury on 27 January 2010 via press release.

5. What is the timetable for the payment of the Special Dividend? Specifically, what are the record, payment and ex-dividend dates?

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The Special Dividend will be paid to: Cadbury Shareholders on the register at the close of business on the date on which the Final Offer becomes or is declared wholly unconditional (the “Existing Shareholders Record Date”), in respect of the shares registered in their name at that time; and (i) the holders of options/awards under the Cadbury share schemes granted but not exercised or satisfied as at 6.00 pm (London time) on 14 January 2010 and any other options/awards granted or made thereafter with the agreement of Kraft Foods who exercise options in respect of Cadbury Shares or whose awards of Cadbury Shares vest and who in either case are entered into the register in respect of such shares after the Existing Shareholders Record Date where such options or awards are satisfied by the issue of Cadbury Shares; and/or (ii) the trustee of any employee benefit trust or nominee to which Cadbury Shares are issued after the Existing Shareholders Record Date in order to satisfy such options/awards under the Cadbury share schemes, in each case in respect of such shares. There will be a “rolling record date” for the holders of options/awards who exercise options or whose awards vest after the Existing Shareholders Record Date. Each holder of options/awards (or the trustee or the nominee as the case may be) shall become entitled to the Special Dividend in respect of the relevant shares upon the exercise of the holders’ options or the vesting of the holders’ awards and them being entered into the register. The ex dividend date for the Special Dividend will be two business days following announcement by Kraft Foods of the offer becoming wholly unconditional, if announced before 8.00 am (London time), or three business days, if announced after 8.00 am (London time). As such, it is currently expected that the ex dividend date will be Friday, 5 February 2010. The payment date for the Special Dividend will be: for Cadbury Shareholders on the register at the close of business on the Existing Shareholders Record Date, the date that is 14 days following the Existing Shareholders Record Date; and for the holders of options/awards under the Cadbury share schemes and/or the trustee of any employee benefit trust and/or the nominee in the circumstances set out above, a date not more than 21 days following the date on which they are entered into the register in respect of the relevant shares. This is to allow entitlements to be dealt with periodically for administrative reasons.

6. Does the 10p Special Dividend replace Cadbury’s planned final dividend of 12.3p?

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Yes.

7. Does the Special Dividend apply to Cadbury ADS's?

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Yes.

8. Is the 10p Special Dividend per Cadbury Share going to be paid net?

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Yes. Shareholders will receive 10p per Cadbury Share. Tax information on the Special Dividend is set out in Section 5 of Appendix IV (page 74) of Kraft’s Final Offer document (“UK taxation – Special Dividend”). Kraft’s Final Offer document provides that – “The Special Dividend may be paid by Cadbury without any withholding or deduction on account of United Kingdom tax.”

9. As per the conditions of the Mix and Match Facility, if Cadbury Shareholders elect to receive all shares, what is the number of New Kraft Foods Shares they would receive per Cadbury Share?

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Information on the Mix and Match Facility is set out in: Section 6 of Part B of Appendix I (pages 35-39) of Kraft’s Final Offer document (“The Mix and Match Facility”); and Kraft’s press release published on 25 January (“Offer Update – Important information in relation to the Mix and Match Facility”).

10. As per the conditions of the Mix and Match Facility, if Cadbury Shareholders elect all cash, what is the amount of cash they would receive per Cadbury Share?

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Information on the Mix and Match Facility is set out in: Section 6 of Part B of Appendix I (pages 35-39) of Kraft’s Final Offer document (“The Mix and Match Facility”); and Kraft’s Press Release published on 25 January (“Offer Update – Important information in relation to the Mix and Match Facility”). Kraft’s Press Release provides that – “Cadbury Securityholders who elect for additional cash under the Mix and Match Facility (providing that there are sufficient off-setting elections for shares) would receive 799 pence per Cadbury Share in cash and 3,195 pence per Cadbury ADS in cash (excluding in each case the Special Dividend of 10 pence per Cadbury Share)."

11. As per the conditions of the Mix and Match Facility, what is the default election if a Cadbury Shareholder makes no election?

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If no election is made, a Cadbury Shareholder will receive the basic offer consideration. For each Cadbury Share they hold this comprises 500 pence (i.e. £5.00) in cash and 0.1874 New Kraft Foods Shares. For each Cadbury ADS they hold this comprises 2000 pence (i.e. £20.00) in cash and 0.7496 New Kraft Foods Shares.

12. I have read that there is an Initial Offer Period and a Subsequent Offer Period. Under the terms of the Mix and Match Facility, is there going to be a separate off-setting and scale-down process for each period?

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Information on the Mix and Match Facility is set out in Section 6 of Part B of Appendix I (pages 35-39) of Kraft’s Final Offer document (“The Mix and Match Facility”). Kraft’s Final Offer document provides that – “Valid elections under the Mix and Match Facility received during the Initial Offer Period will be off-set against each other in one off-setting pool for the purposes of determining the nominal amount of cash and New Kraft Foods Shares available to meet such elections. Valid elections under the Mix and Match Facility received during the Subsequent Offer Period will be settled on various settlement dates, and each election received (or validated or completed) during the Subsequent Offer Period will be off-set against all other such elections settled on the same settlement date in one off-setting pool for the purposes of determining the nominal amount of cash and New Kraft Foods Shares available to meet such elections.”

13. When will Cadbury Shareholders receive the consideration?

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Information on the date of settlement of the consideration is set out in paragraph 5 of Section A of Part 2 (page 22) of Kraft’s Final Offer document. Kraft’s Final Offer document provides that – “Subject to the Final Offer becoming or being declared wholly unconditional (and except as provided in paragraphs 7 or 8 of Part B of Appendix I), settlement of the consideration to which any Cadbury Shareholder is entitled under the Final Offer will be effected: in the case of complete acceptances received by the date on which the Final Offer becomes or is declared wholly unconditional, within 14 calendar days of such date; and in the case of complete acceptances received after such date but while the Final Offer remains open for acceptance, within 14 calendar days of receipt.”

RESPONSIBILITY

The directors of Cadbury accept responsibility for the information contained in this document, save that the sole responsibility accepted by the directors of Cadbury in respect of information relating to Kraft contained in this document has been to ensure that such information has been correctly compiled from published sources and is correctly and fairly reproduced and presented. Subject to the aforesaid, the directors of Cadbury confirm that to the best of their knowledge and belief (having taken all reasonable care to ensure that such is the case), the information contained in this document for which they are responsible is in accordance with the facts and, where appropriate, does not omit anything likely to affect the import of such information.