London: In yet another twist to the ongoing tussle for Cadbury, US-based Kraft Foods is looking at raising the cash component of its hostile takeover bid for the British confectioner.
The over 10-billion pounds takeover bid has been rejected by a majority of shareholders and management of Cadbury.
British daily The Times today reported that "advisers to Kraft are considering a plan to raise the cash component of the US food company's hostile offer for Cadbury".
The publication said that Kraft, advised by Lazard, Citigroup and Deutsche Bank, is mulling another boost to the cash part of its cash-and-share offer, "to make it more appealing to hedge funds and UK institutional investors that do not want American shares".
The Cadbury management, which has rejected the Kraft offer saying that it undervalues the company, would publish documents in defence against the hostile bid on January 12.
On January 6, Kraft had raised the cash component of its Cadbury offer by about 60 pence per Cadbury share to 360 pence or 240 pence per Cadbury ADS.
However, the daily said more cash is unlikely to secure the takeover without a parallel rise in overall offer value.
"The odds of a deal shortened yesterday as Cadbury's share price fell below the value of Kraft's offer for the first time," the report noted.
According to the daily, insiders speculated the fall in Cadbury's share price could now encourage Kraft to raise its bid to a little over 800 pence.
Kraft has time till January 19 to make the final offer for Cadbury.
The American entity has received the European Union's antitrust approval for the proposed takeover on the condition that it divests Cadbury's Polish and Romanian chocolate businesses if the deal materialises.
Meanwhile, Kraft is facing opposition from its top shareholder -- billionaire Warren Buffett-led Berkshire Hathaway. The conglomerate has voted against the company issuing new shares for the proposed Cadbury deal.
PTI
First Published: Friday, January 08, 2010, 20:12