Cadbury workers unite to resist Kraft

British and Irish workers at Cadbury Plc will launch a campaign tomorrow to fend off a hostile takeover bid from Kraft Foods Inc. and avoid potential job losses and pay cuts at a combined company.

Britain's largest trade union Unite said it was organising the demonstration in Cadbury's home city of Birmingham the day after top executives publish an official defence document to fight off the bid from the American giant.

Cadbury workers from the UK and Dublin will join together to resist the Kraft bid, which they say will saddle Cadbury with enormous debt and involve job losses and pay cuts to meet Kraft's massive borrowing needs for the bid.

The "Keep Cadbury Independent" campaign will be launched at midday tomorrow with support from local Members of Parliament, at Cadbury's historic Bournville home, which houses the group's main British chocolate factory.

"Cadbury is a great UK success story - and it was and is not for sale. But suddenly a hostile bid and swarming speculators has thrown its future, its investment plans and jobs of thousands of workers here and in Ireland up in the air," Unite's assistant general secretary, Len McCluskey, said in a statement.

Another potential suitor is Hershey Co, which is close to deciding whether to pursue a rival offer to buy Cadbury, The Wall Street Journal reported late on Wednesday.

Hershey and the charitable trust that controls the chocolate maker are leaning towards launching a bid, the newspaper reported.

One potential hold-up for Hershey is the hit its credit rating would take if it bought Cadbury; the acquisition would add $10 billion in debt to its balance sheet, the newspaper said.

Hershey and the trust declined comment.

The union, for now, is focussed on Kraft's offer rather than Hershey or other potential interlopers such as Italy's Ferrero or Nestle.

Unite said it would urge Cadbury shareholders to reject Kraft's takeover bid, saying the US company had a poor record in takeovers and a falling stock price.

The union, which will take the campaign to Parliament in London on Wednesday, also cited concerns that investment decisions will be taken outside the UK.

Kraft has posted its cash-and-stock offer to Cadbury shareholders. The bid is currently worth 724p per share. Cadbury's share price is 8.5 per cent higher at 785.5p. Shareholders have until February 2 to decide whether to accept it.

Kraft could not be immediately reached for comment.