Kraft in waiting game as Cadbury deadline nears

By Victoria Howley and David Jones

LONDON (Reuters) - Kraft Foods (KFT.N: Quote, Profile, Research) is persisting in its waiting game as a deadline for its acquisition of British confectioner Cadbury (CBRY.L: Quote, Profile, Research) nears, and many see a formal bid coming in close to its tight first offer.

The North American food group is likely to keep the same terms as its informal offer, which values Cadbury at 10.2 billion pounds ($16.9 billion) before sweetening its bid later, sources familiar with the matter have said,

"We anticipate the bid coming on Monday to kick off the formal takeover process," said one analyst, speaking on the condition of anonymity.

Cadbury early in September rejected the cash-and-share offer, worth 745 pence per share at the time and at 722 pence at current values. At 762 pence on Friday, markets showed they were not expecting a massive extra pay-out from Kraft, led by its determined chief executive, Irene Rosenfeld.

Bankers said that Cadbury was likely to reject a bid worth 745 pence a share or less, arguing that any offer below 800 pence a share would not bring the confectioner into talks.

"Cadbury will emphasize the value of its stand-alone plan. It will argue that it does not need Kraft and that any such offer undervalues its growth prospects," said an investment banker, who is not involved in the deal.

He added that there was a slim chance that Kraft might increase the cash portion of its opening bid.

Under British takeover rules, Kraft needs to put in a formal bid by the close of business on Monday or else walk away for six months. The fact that it is waiting until the last few days shows it believes there are no rival bidders.