Determined to become a global food and confectionery giant, Kraft Foods said Monday that it would pursue a $16.7 billion takeover of Cadbury, the British chocolate maker, even after Cadbury rejected that offer as too low. Shares of Cadbury soared 41 percent in the day's trading in London, and above the offer price, indicating that investors expected a higher bid from Kraft or a proposal from a rival candy company like Nestl? or Hershey. Some analysts said Cadbury could be worth as much as 43 percent more than Kraft offered. Combining Kraft, which makes Oreo cookies, Toblerone chocolates and Ritz crackers, with Cadbury's Trident gum and Dairy Milk chocolates would create a giant with $50 billion in yearly revenue, spanning the world from the United States and Mexico to Britain and India. Analysts said that confectionery companies tend to trade at higher values, so adding the chocolate and gum business could enhance Kraft's allure with investors. But Cadbury said that it had reviewed Kraft's proposal, which was made public on Monday, and had rejected it because it 'fundamentally undervalues the group and its prospects.' Kraft's chief executive, Irene B. Rosenfeld, has a deep background in food and beverages, and turned around the chips business at PepsiCo before joining Kraft in 2006. Nelson W. Peltz and his activist firm, Trian Fund Management, own a stake in Kraft and have nudged it to sell certain assets and bolster the stock price in the past. Mr. Peltz also owns a 3 percent stake in Cadbury and pushed successfully to split off its beverage unit, now known as the Dr Pepper Snapple Group. Peltz declined to comment on Kraft's proposal. A takeover of Cadbury would help Kraft, the biggest food conglomerate in North America, compete with its larger rival, Nestle. Cadbury would strengthen Kraft's market share in Britain and open India, where Cadbury is among the most popular chocolate brands. It would also expand Kraft's gum business and give it a global distribution network. Nestle lacks a gum business and is struggling with declining sales as recession-plagued consumers turn away from its bottled water and ice cream. Analysts have flagged Cadbury as a potential acquisition for Kraft for several years, but such speculation cooled when Kraft acquired the biscuits and cereal snack unit of France's Danone in 2007. Cadbury and Kraft have been doing relatively well in recent months. Cadbury said in February that its confectionery business had proved 'resilient' despite price increases because of higher commodity costs. Kraft has benefited from rising sales of its convenience foods, like DiGiorno frozen pizza and Oscar Mayer sandwich meats, as consumers eat more meals at home. Among Cadbury's biggest attractions is its chewing gum business, especially in Latin America and Europe, which expanded in 2003 with the acquisition of Adams Confectionery to include Trident and Bubbas bubble gum. Competition then heated up when Mars acquired Wrigley. For months, Hershey had been mulling a bid for Cadbury, and it has hired JPMorgan Chase as an adviser, according to people briefed on the matter. Some analysts speculated about the possibility of a joint bid by Nestle and Hershey, allowing Nestle to take Cadbury's gum business to compete better with Mars and letting Hershey take over the chocolate operation. A Nestle representative declined to comment and pointed to a statement on Monday by Paul Bulcke, the chief executive, that Nestle had no plans for major acquisitions in 2009 and 2010. The takeover bid could not have come at a worse time for Cadbury's chief executive, Todd Stitzer. The company is halfway through its plan to increase operating profit margins to about 15 percent in 2011, from about 10 percent in 2007. Cadbury's shares have risen about 33 percent since it spun off its Dr Pepper beverage unit in 2008 to focus on its confectionery business. The company, whose corporate roots can be traced to 1824 when John Cadbury opened a shop in Birmingham, England, to sell tea, coffee and, later, cocoa beverages, is not expected to give in easily. It said that it was 'confident in Cadbury's stand-alone strategy and growth prospects as a result of its strong brands, unique category and geographic scope.' Speaking in a conference call on Monday, Rosenfeld of Kraft disagreed. 'Cadbury has limited opportunity as a stand-alone entity in this increasingly competitive environment,' she said, adding that Kraft 'feels quite confident with the proposal' and 'looks forward to continuing the dialogue.' Kraft had not contacted Cadbury investors directly, she said. Rosenfeld met Cadbury's chairman, Roger Carr, on Aug. 28 to discuss a possible combination, Kraft said in a statement. An exchange of letters followed, but after Cadbury rejected Kraft's proposal, Rosenfeld decided to make the offer public to encourage further discussions. Under the proposal, Cadbury shareholders would get 3 pounds, or $4.92, in cash and 0.2589 in Kraft Foods shares for each Cadbury share. Kraft said the offer valued the company at 7.45 pounds, or $12.22, a share, a premium of 31 percent over Cadbury's closing share price of 5.68 pounds on Friday. In London, shares rose to 7.83 pounds on Monday. Jeremy Batstone-Carr, an analyst at Charles Stanley in London, called the proposal 'somewhat opportunistic' and said 'Kraft will need to up its offer to have any serious chance of success, perhaps to 800 pence in cash or higher.' A report by Sanford C. Bernstein said Kraft was right to go after Cadbury but valued the British company at 8.55 pounds to 10.7 pounds a share, based on Wrigley's acquisition of Mars in 2008. A takeover would result in an annual pretax cost savings of $625 million in marketing spending, procurement and research and development, Kraft said in a statement. It would result in higher earnings per share, after all transaction-related costs were included, in the second year, Kraft said. Kraft said it would finance the deal through debt and was prepared to offer Cadbury shareholders the opportunity to elect, subject to availability, the part they would receive in cash and in new Kraft Foods shares. Christopher Growe, a food company analyst with Stifel Nicolaus, applauded the Kraft team. 'Irene has done a great job transforming this company and bringing Kraft to a point where they could build this bigger business,' he said. 'I don't think Kraft was ready for a transaction of this size a year ago.' Lazard is acting as lead financial adviser to Kraft. Centerview Partners, Citigroup and Deutsche Bank are other financial advisers, with Citigroup and Deutsche Bank acting as corporate brokers, providing financing. Cadbury's advisers are UBS, Goldman Sachs and Morgan Stanley. 