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Cadbury set for Kraft bid

THE board of Cadbury was this morning readying itself for a last-ditch hostile bid from Kraft, the American food group, which is expected to table a takeover offer worth &pound;10bn.<br /><br />Kraft, the maker of Oreo Cookies and Dairylea cheese, has until 5pm under Takeover Panel rules to make a bid or walk away for six months.<br /><br />It is expected the Chicago-based conglomerate will formalise its existing cash-and-shares offer for the British chocolatier. Worth &pound;10.2bn in September, the offer now amounts to &pound;9.8bn following the slide in Kraft&rsquo;s share price. The see-through value of the deal has fallen from 745p a share to 720p.<br /><br />Roger Carr, Cadbury&rsquo;s chairman, has spent the past week lobbying shareholders to stand firm against a repeat bid. While Cadbury is determined to reject any offer short of a substantial hike to the original proposal, Kraft has lined up $9bn (&pound;5.4bn) in bridge financing, enough to crank up the cash component of the bid from 300p a share to 400p if necessary.<br /><br />Kraft believes several major shareholders will be swayed by an improved follow-up bid given the potential downside to Cadbury&rsquo;s share price should the US firm decide to pull out.<br /><br />Shares in Cadbury leapt almost 40 per cent after it rejected Kraft&rsquo;s first approach in September. They closed at 58p as the deadline loomed last week, their lowest level since rumours of a takeover began to circulate.