Cadbury shareholders still resisting Kraft takeover bid

SOME of Cadbury's biggest shareholders, led by Legal & General, continued to reject Kraft Foods' £10.5 billion bid and will look for an increased offer before next week's deadline for the US firm to increase terms.

The confectioner has been fighting off Kraft's hostile cash and shares bid for more than four months, and yesterday received support from its number two shareholder, Legal & General Investment Management.

"Our position on Cadbury is unchanged: we continue to believe that the current Kraft bid does not reflect the long-term value offered by the company on a standalone basis," said L&G's head of UK equities, Mark Burgess. L&G is Cadbury's second-largest investor with a 5.1 per cent stake, behind the New Jersey-based Franklin Mutual Advisers with 7.7 per cent. The UK investor also rejected the hostile bid on 7 September, the day the offer for Cadbury was made public.

Earlier this month, Kraft raised the cash portion of its offer by 60p, but kept the overall value unchanged. The bid values Cadbury at 760p.

Kraft has until Tuesday to raise its bid. Analysts and investors believe the US food giant will need to increase its bid to 800p or above to succeed.

Meanwhile, US-based Hershey, which is pondering a bid, according to sources close to the situation, will need to show its hand with a fully financed bid by 23 January.