Kraft Likely to Sweeten Cadbury Offer

As Kraft Foods shares fall following its $16.7bn takeover bid of UK confectionary giant Cadbury, analysts were left asking what’s left for the behemoth.

Nestle, the only other company with enough money to bid for Cadbury, has already said it’s uninterested.

In a report published by Reuters today, analysts said they believe Kraft and Cadbury will eventually come to a deal – but Kraft will have to sweeten its offering first.

“Investors like the logic of the combination and few, if any, counter bidders are seen likely to emerge, raising pressure on Cadbury’s management to do a deal at the right price,” Reuters said.

Analysts believe Kraft is now likely to revise its offer to Cadbury – which offered 60% of the price. Analysts told Reuters they believed shareholders would want more cash.

With Nestle out of the competition, however, Kraft will be allowed to work at its own pace on offers, but with its share price falling 5.9% in pre-market trade today it may want to present a second option soon.