INSTANT VIEW: Kraft bids $16.7 billion for Britain's Cadbury

LONDON (Reuters) - North America's biggest food group Kraft Foods Inc said on Monday it had made a $16.7 billion bid for Britain's Cadbury but that the world's second largest confectionery group had rejected the approach.

Following are analysts' reactions to the bid approach:

CAZENOVE

"We continue to believe that it makes commercial sense for Kraft to acquire Cadbury particularly in Europe and Latin America.

"We had previously valued the Cadbury assets at 800p per share and had assumed in a Kraft acquisition of Cadbury cost synergies of $605 million, or 4 percent of combined confectionery sales.

"In our view, the most likely alternative bid would come from Nestle, although it would face considerable anti-trust issues and lower cost synergies."

DAVID BUIK, BGC PARTNERS

"Even if it makes commercial sense for Cadburys to be bought by Kraft Foods, you can be sure that the ... Competition Commission will give it their best shot to stop this deal."

EVOLUTION SECURITIES

"In 2007, Mars bought Wrigley for $23 billion creating a global confectionery powerhouse with 15 percent market share ... In our view this made a deal for Cadbury inevitable as it fundamentally changed the confectionery economic landscape.

"We think there is a reasonable chance that Nestle/Hershey could counter bid with Nestle taking gum & Hershey taking chocolate."

"Cleverly Kraft have said that they will not close key Cadbury UK facilities such as Somerdale and will thus preserve UK jobs ... playing the political angle. "It is not clear how Kraft will fund this given $15 billion of debt post their acquisition of Danone biscuits."

BERNSTEIN RESEARCH

"We think it makes perfect sense for Kraft to acquire Cadbury and they should do it ... subject to the right price for both parties.

"The 31 percent premium to Friday's close might seem attractive, but we think Cadbury can get much more ... We think 15-16x EBITDA is a reasonable multiple.

"Mars paid 19.5x for Wrigley in May 2008, and arguably Cadbury has much more profit growth potential than Wrigley had at that time. At 15-16x 2008 EBITDA we get 8.55 to 9.20 pounds. At 15-16x 2009 EBITDA we get 10.00 to 10.70 pounds."

(Reporting by Paul Hoskins; Editing by David Holmes)