Cadbury shares are set to jump this morning after mounting talk last night that Ferrero could make a joint bid with Hershey for the British confectionery group.

Ferrero is thought to be working on a syndicated loan of about €3bn (£2.8bn). According to an Italian newspaper, Mediobanca, which advises the Italian chocolate maker, has contacted other Italian banks – Intesa Sanpaolo and UniCredit - in the hope of getting up to five banks to lend between $750m and $1bn each.

Ferrero has until 2 February to make a counterbid to an offer from Kraft, which Cadbury has rejected. Both Ferrero and US confectioner Hershey are smaller than Cadbury and need significant funding to launch an offer. Ferrero declined to comment, reiterating a November statement that it was assessing its options.

Cadbury sets out its final defence against the Kraft bid tomorrow, followed by a trading update on Friday. It is expected to attack Kraft’s stock price performance over the past few years. Kraft sold its North American pizza business to Swiss food group Nestle last week, enabling it to improve the cash component of its offer. Nestle has ruled itself out of the bidding.

Cadbury’s chairman launched yet another fierce attack on Kraft yesterday. Roger Carr accused the US firm of being run by its biggest shareholder, Warren Buffett, He said Buffett’s opposition to the bid and pressure from ratings agencies severely limited Kraft’s ability to improve its offer.

It has until 19 January to decide whether to raise its cash and shares bid, which currently values Cadbury at 769p a share, or £10.5bn. Ferrero and Hershey are likely to wait until then before entering the fray.

Cadbury’s chief executive Todd Stitzer has made it clear that the company would prefer being taken over by Hershey rather than Kraft because of the companies’ cultural similarities.