Cadbury turned up the heat in its defense against a takeover from Kraft as its Chairman Roger Carr said it was an unappealing prospect being absorbed into Kraft's low growth conglomerate business model.

In the letter to Kraft's Chairman and CEO Irene Rosenfeld on Saturday, Carr reaffirmed the British confectionery group's rejection of Kraft's bid, initially valued at 10.2 billion pounds ($17 billion), as it fundamentally undervalued Cadbury.

Under your proposal, Cadbury would be absorbed into Kraft's low growth, conglomerate business model, an unappealing prospect which contrasts sharply with our strategy to be a pure play confectionery company, Carr said in the letter seen by Reuters.

U.S. food giant Kraft launched its cash and shares bid for Cadbury Monday in an attempt to create the world's largest confectionery group. It offered Cadbury shareholders 745 pence a share, but the value of the bid has fallen as Kraft shares have slipped and the dollar has weakened against the pound.

Carr said Kraft's proposal for his shareholders was to exchange shares in a pure-play confectionery group for cash and shares in a company with a considerably less focused business mix and historically lower growth.

We are committed to the delivery of optimum value to our shareholders and our board remains convinced that this is achieved through continuing to deliver our standalone pure play confectionery strategy, Carr added in his letter.

In addition, the proposal is of uncertain value for Cadbury shareholders as underlined by the movement in the Kraft share price since your announcement, he said.

Kraft's bid is worth 300p in cash and 0.2589 new Kraft shares for each Cadbury share. This valued Cadbury at 745p or 10.2 billion pounds ($17 billion) at the time, but this had fallen to around 707p late Friday due to the weakness in Kraft shares and the dollar compared to Cadbury's close Friday at 775-1/2p.

The deal would bring together Cadbury, the world's second largest confectionery group after privately-owned Mars-Wrigley, with its Dairy Milk chocolate and Trident gum, together with Kraft's portfolio of Milka and Toblerone chocolates, Oreo biscuits and Philadelphia cheese.

Analysts say there is compelling logic to a potential deal adding Cadbury's high growth emerging market business into Kraft's wide ranging distribution system, with few overlaps which might prompt any anti-trust concerns.

Most independent analysts at brokers not involved in the bid expect Kraft to raise the bid price to between 850-900p, while some believe a bigger cash element is needed to attract Cadbury's shareholders into acceptance.

(Reporting by David Jones; editing by Andy Bruce)