Kraft in closing stages of £11.7billion Cadbury takeover

US firm Kraft is finalising the details of an £11.7 billion takeover of British confectioner Cadbury, both companies confirmed this morning.

The American firm, whose brands include Toblerone, Philadelphia and Dairylea, revised their previous bid for the Midlands-based firm and a deal with the backing of the Cadbury board is expected to be announced shortly.

The US food giant's new deal is reportedly worth between 840 and 850 pence per share, and at 850p would value Cadbury at 11.7 billion.

A recommendation from the Cadbury board would mark a turnaround in the hotly contested bid battle, with the group's bosses so far having labelled Kraft's hostile approaches "derisory".

If shareholders back a deal, it would also bring to an end Cadbury's history as an independent company dating back to 1824.

Shares in the chocolate group rose another 3% today to 836p, following a 1.7% gain yesterday as the market anticipated a higher offer.

But leading investors in the business have snubbed Kraft's pursuit so far, with Standard Life putting a price of at least 9 a share on Cadbury – which would value the firm at well over 12 billion.

Kraft has until now only increased the cash portion of its offer without raising the overall bid and is under pressure not to over-pay from its biggest shareholder, renowned US billionaire investor Warren Buffett.

The group – whose interest in Cadbury first emerged in September last year – has also faced strong opposition from UK trade unions and the Government, with Business Secretary Lord Mandelson sending out recent warning shots.

Unite estimates that 7,000 jobs at Cadbury would be threatened if Kraft secures a takeover, because of a "colossal" 22 billion of debt it believes would swamp the group.

Speculation of a potential white knight counter-bid from US rival Hershey has been mounting and the Kisses maker has already confirmed it is considering its options for Cadbury.

Hershey, which has an existing relationship with Cadbury making Dairy Milk bars and Creme Eggs under licence in the US, is said to have decided that it can mount a bid without losing its investment-grade credit rating.