Kraft set to sweeten Cadbury takeover bid

The Sunday Times, which did not cite its source, said that Kraft was putting the "finishing touches" over the weekend to raising its £10.5 billion (€11.7 billion, US$16.9 billion) offer.

Kraft will improve its bid from 771 pence per share to at least 820 pence on Monday, according to the weekly paper, which added that the US group would hike the cash part of its offer to win around Cadbury investors.

The Observer newspaper also reported on Sunday that Kraft was considering offering an extra £1.0 billion in cash, which would lift the bid to 820 pence. The paper cited Wall Street sources.

Cadbury has repeatedly rejected Kraft's cash and shares offer, which was launched late last year, and has denounced it as "derisory".

Kraft had already raised the cash component earlier this month, after selling its North American pizza division to Swiss rival Nestle for $3.7 billion.

A tie-up between Kraft and Cadbury would bring together leading Kraft brands like Dairylea cheese, Kenco coffee and Toblerone with the British group's Dairy Milk chocolate, Cadbury Creme Eggs and Trident chewing gum.

Meanwhile, a potential takeover war was brewing after a separate media report suggested that US chocolate maker Hershey was about to enter the fray.

Hershey plans to bid at least $17.9 billion this week for Cadbury after concluding it can top US food giant Kraft's offer, The Wall Street Journal reported on Friday.

Hershey was finalizing a financing package that now includes a loan of at least $10 billion from banks, five billion in new Hershey shares and at least three billion from private investors and the Hershey trust, the Journal said, citing people familiar with the matter.

Source: AFP

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