Hedge fund Paulson & Co raises bet on Cadbury

BOSTON (Reuters) - Hedge fund firm Paulson & Co, which earned billions with savvy bets during the credit crisis, has doubled its stake in candy maker Cadbury Plc, according to a regulatory filing released on Tuesday.

The New York-based hedge fund now owns 28.5 million shares, or 2.08 percent, of Cadbury after it bought 14.8 million shares for 759.59 pence, the British regulatory filing shows.

Paulson's founder, John Paulson ranks as one of the $1.5 trillion hedge fund industry's best traders and cemented his reputation by defying conventional wisdom with bets U.S. housing prices could fall on a national scale. With that bet, Paulson became the industry's highest-paid manager by earning more than $3 billion in 2007.

The hedge fund's move in Cadbury was announced on the heels of news that U.S. food giant Kraft Foods Inc would not sweeten its $16.2 billion offer for the British company.

Instead Kraft plans to take its offer to Cadbury shareholders, setting the stage for a bitter takeover battle that could last months.

(Reporting by Svea Herbst-Bayliss; editing by Andre Grenon)