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Cadbury likely to back Kraft bid Cadbury likely to back Kraft bid
(19 minutes later)
Kraft Foods is expected to raise its bid for Cadbury to a level that is accepted by the UK firm, BBC business editor Robert Peston has learned.Kraft Foods is expected to raise its bid for Cadbury to a level that is accepted by the UK firm, BBC business editor Robert Peston has learned.
He says the US giant may raise its offer to between 840 and 850 pence per share, which at 850p would value the chocolate-maker at £11.7bn. He says the US giant may raise its offer to between 840 and 850 pence per share, with 850p valuing the chocolate-maker at £11.7bn.
Kraft launched its hostile takeover bid for Cadbury in December, having its previous offer of 761p rejected.Kraft launched its hostile takeover bid for Cadbury in December, having its previous offer of 761p rejected.
The two firms may jointly announce the successful bid on Tuesday morning. The two firms may jointly announce the successful bid later.
Shares in Cadbury ended Monday trading up 14 pence or 1.8% to 807.50p.Shares in Cadbury ended Monday trading up 14 pence or 1.8% to 807.50p.
No-one from either Cadbury or Kraft has been available for comment.No-one from either Cadbury or Kraft has been available for comment.
Losing independenceLosing independence
Our business editor said it now seems "highly likely" that Kraft and Cadbury will agree a deal that will probably be announced at 0700 GMT on Tuesday. Our business editor said it now seems "highly likely" that Kraft and Cadbury will agree a deal that will probably be announced at 0700 GMT.
CADBURY John Cadbury, a Quaker, opened shop in Birmingham in 1824, selling tea, coffee and hot chocolate - as an alternative to alcohol Dairy Milk brand introduced in 1905, with Milk Tray coming 10 years laterMerged with Schweppes drinks business in 1969. Its drinks arm was spun off in 2008Employs about 45,000 people in 60 countries Read Robert Peston's blog Cadbury's fight for independence See Cadbury's share price CADBURY John Cadbury, a Quaker, opened a shop in Birmingham in 1824, selling tea, coffee and hot chocolate - as an alternative to alcohol Dairy Milk brand introduced in 1905, with Milk Tray coming 10 years laterMerged with Schweppes drinks business in 1969. Its drinks arm was spun off in 2008Employs about 45,000 people in 60 countries Read Robert Peston's blog Cadbury's fight for independence See Cadbury's share price
An agreement between the two companies would end the intense animosity between the firms that has been manifested since Kraft announced its desire to own Cadbury last autumn. An agreement between the two companies would end the intense animosity between the firms that first manifested itself when Kraft announced its desire to own Cadbury last autumn.
It would also end any doubt at all that Cadbury will lose its independence.It would also end any doubt at all that Cadbury will lose its independence.
There would still be a theoretical possibility that the US confectioner Hershey would come in with a higher offer.There would still be a theoretical possibility that the US confectioner Hershey would come in with a higher offer.
But if Cadbury's board recommends Kraft's bid, it means that the company will be taken over.But if Cadbury's board recommends Kraft's bid, it means that the company will be taken over.
Jobs fearsJobs fears
Negotiations between Cadbury's bankers and Kraft's bankers are taking place overnight.Negotiations between Cadbury's bankers and Kraft's bankers are taking place overnight.
KRAFT FOODS Founded in Illinois as a cheese wholesaler in 1903Bought in 1988 by Philip Morris, which also purchased Nabisco for $19.2bn in 2000 before integrating it into Kraft FoodsMore than 40 of its brands are more than 100 years oldHas 98,000 employees and 168 manufacturing and processing facilities worldwideKRAFT FOODS Founded in Illinois as a cheese wholesaler in 1903Bought in 1988 by Philip Morris, which also purchased Nabisco for $19.2bn in 2000 before integrating it into Kraft FoodsMore than 40 of its brands are more than 100 years oldHas 98,000 employees and 168 manufacturing and processing facilities worldwide
Unions and analysts have both warned that there will likely be job losses among Cadbury's 45,000 workforce following a takeover.Unions and analysts have both warned that there will likely be job losses among Cadbury's 45,000 workforce following a takeover.
Kraft has a Tuesday deadline to make its second and final formal bid for Cadbury, or else have to walk away from the deal for a year.Kraft has a Tuesday deadline to make its second and final formal bid for Cadbury, or else have to walk away from the deal for a year.
The US giant had previously faced pressure from its leading shareholder - US billionaire investor Warren Buffett - not to overpay for Cadbury.The US giant had previously faced pressure from its leading shareholder - US billionaire investor Warren Buffett - not to overpay for Cadbury.
However, Kraft raised extra funds earlier this month when it sold its North American pizza business to Swiss group Nestle for $3.7bn (£2.3bn).However, Kraft raised extra funds earlier this month when it sold its North American pizza business to Swiss group Nestle for $3.7bn (£2.3bn).