Paulson doubles stake in Cadbury after Kraft bid

Hedge fund star John Paulson, who bet against the US housing market just before its collapse, has doubled his stake in Cadbury.<br /><br />The New York-based hedge fund now owns 28.5m shares, or 2.08 per cent, of Cadbury after spending some &pound;112m on 14.8m shares at 759.59p, according to British regulatory filings.<br /><br />John Paulson ranks as one of the $1.5 trillion hedge fund industry&rsquo;s best traders and cemented his reputation by defying conventional wisdom with bets US housing prices could fall on a national scale. With that bet Paulson became the industry&rsquo;s highest-paid manager by earning more than $3bn in 2007.<br /><br />The hedge fund&rsquo;s move in Cadbury was announced hot on the heels of news that USfood giant Kraft Foods would not sweeten its $16.2bn (&pound;9.67bn) offer for the company.<br /><br />Instead Kraft plans to take its offer to Cadbury shareholders, setting the stage for a bitter takeover battle that could last months. <br /><br />Bernstein analysts said that Kraft would have to raise its price to around 850p to stand a chance of the bid being accepted. <br /><br />Bernstein&rsquo;s Andrew Wood said: &ldquo;The acquisition of Cadbury would be a &lsquo;once in a lifetime opportunity&rsquo; for Kraft to significantly strengthen its portfolio by acquiring Cadbury&rsquo;s strong positions in attractive categories and markets.&rdquo; <br /><br />Cadbury shares yesterday closed up 0.26 per cent to 763p.