Cadbury Chief Executive Todd Stitzer noted that past deals in the industry have been agreed at higher multiples than that implied by the offer from Kraft, according to a Bank of America/Merrill Lynch note obtained by Reuters.
The note was published by sales specialist Simon Archer and based on Stitzer's remarks at a closed investor conference in London.
As originally published, the note said: On price, Todd seemed to admit that a 15x EBITDA multiple would be a fair price.
But Archer has since issued a clarification saying Stitzer's comments were only in the context of comparable transactions being in the mid-teens - he was not implying a fair value for the business.
Stitzer's exact remarks were not immediately available either from Archer or Cadbury.
The sales specialist noted specific prior transactions highlighted at the conference were the previously attempted Wrigley/Hershey deal which was proposed at 15-16 times EBITDA, and Kraft's circa 13.7 times purchase of Danone's biscuit business which some might argue is lower growth.
A deal multiple of above 17x EBITDA such as last year's Mars/Wrigley merger was cited as an outlier.
The offer from Kraft that has been rejected by Cadbury is estimated by Credit Suisse as around 12.5 times 2009 EBITDA.
According to the note Stitzer also told investors that he does not expect Kraft to walk away from its proposed acquisition of Cadbury, that he sees some strategic sense in combining the two companies, and gave examples of revenue synergies from such a deal.
Credit Suisse analysts say a multiple in the mid-teens would put the price for Cadbury around 900 pence per share, valuing the entire company at 12.2 billion pounds ($20.4 billion), up from Kraft's initial bid of 745 pence per share, or 10.2 billion pounds.
Cadbury shares were up 0.25 percent at 790 pence by 1055 GMT while the current Kraft cash and share offer is valued at around 718 pence, reflecting the recent fall in Kraft shares, which closed off 1 percent at $26.49 on Tuesday.
Jeremy Batstone-Carr, analyst at Charles Stanley, said a price at 15 times EBITDA looked punchy and at that level would result in decimation of the Cadbury workforce.
In order to make a deal of that order of magnitude stack up, Kraft would have to sharply increase the level of... cost savings it could achieve. I don't even think Kraft could pay that kind of money actually, he said.
Most analysts expect Kraft will have to raise the bid to 850-900p to win Cadbury.
Stitzer also outlined areas where synergies might be found to bolster Kraft's modest $625 million annual target, the Merrill note said. He saw revenue synergies between Cadbury and Kraft in countries such as Germany, China and Brazil.
He said Cadbury gained cost synergies of 7-8 percent and 6-7 percent revenue synergies from its acquisition of Trident gum group Adams in 2003, while Kraft is only targeting cost synergies of 6.5 percent from a possible Cadbury deal.
Kraft's Chairman and CEO Irene Rosenfeld told investors in a separate meeting there are more synergies out there that Kraft cannot quantify without doing due diligence on Cadbury's financial books, while her team said that it did not anticipate financing the bid to be an issue.
Cadbury is quite a compelling opportunity but not at any price, she told investors according to the note.
Kraft launched its bid for Cadbury on September 7 in a deal to create the world's biggest confectionery group bringing Cadbury's Dairy Milk chocolate and Trident gum together with Kraft's portfolio of Milka chocolate and Oreo biscuits, but Cadbury rejected the bid saying it undervalued the group.
Stitzer and Rosenfeld are attending the two-day Bank of America/Merrill Lynch Global Consumer and Retail Conference in London, starting Tuesday, where they are speaking to investors in separate sessions.
(Reporting by Raji Menon, David Jones and Joel Dimmock; Editing by Chris Wickham)