Kraft, the American food group, was last night working on plans to announce an increased offer for Cadbury on Monday morning in London.
With Monday being a bank holiday in America, insiders said that Kraft wanted to take advantage of the closure of the stock markets there and gain 24 hours to convince shareholders of the merits of the deal before news of the higher bid could affect its share price.
People close to Kraft confirmed that the company was set to increase its offer, but said that the company may yet have to push back its new bid until Tuesday if its advisers could not complete the paperwork in time for a Monday launch.
Insiders said last night that Kraft’s board and advisers were still finalising its ultimate offer price. Kraft must make its final and best offer by Tuesday.
The present offer values Cadbury at about £10.5 billion, but Kraft’s part-cash, part-share bid, made in September, is pitched below the price of the British chocolate maker’s shares, which closed yesterday at 793½p.
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Hedge fund investors in Cadbury expect Kraft to increase its offer to between 820p and 830p a share in the hope of persuading enough shareholders to accept.
A person close to Kraft said last night that the American group’s final bid would be lower than the figure that some of Cadbury’s British shareholders have demanded.
Legal & General, one of Cadbury’s biggest UK institutional investors, reiterated yesterday that Kraft’s present bid fell well short of what it would accept for the company.
Mark Burgess, Legal & General’s head of active equities, who manages about 5 per cent of Cadbury, said: “Our position is unchanged. We continue to believe that the Kraft bid does not reflect the long-term value offered by the company on a standalone basis.”
His comments followed earlier statements by Peter Langerman, chief executive of Franklin Mutual, whose fund holds 7 per cent of Cadbury. “We have absolutely no interest in accepting the Kraft offer,” Mr Langerman said.
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Irene Rosenfeld, chief executive of Kraft, travelled to London this week to meet Cadbury’s British investors.