Kraft faces tougher Cadbury pitch

An announcement formalizing Kraft's current offer is expected on Monday, under a deadline set by the UK Takeover Panel, one source familiar with the situation told Reuters. The source could not be identified by name because he was not authorized to speak with the media.

Kraft is unlikely to raise its offer or change the cash-and-stock mix of the bid at this time because it faces no rival suitors for Cadbury, said the source familiar with the situation, who cautioned that plans could still be altered, before or after Monday.

"Formalizing the bid is just a starting point," said the source. "Anything could change after that."

If Kraft failed to formalise its bid by 6 p.m. British time on Monday November 9, it would have to walk away from Cadbury for six months under UK takeover rules.

Kraft made a cash-and-shares offer in early September that was rejected by Cadbury. Formalizing the offer without a recommendation from Cadbury would turn the bid hostile.

The initial approach was priced at 745p a Cadbury share, or 10.2 billion pounds ($16.8 billion), but the fall in Kraft shares makes it presently worth around 733p, against a current Cadbury share price of around 767p.

Kraft released its quarterly results after the U.S. market close on Tuesday, reporting revenue that fell short of Wall Street expectations and cutting its sales forecast.

The world's No. 2 foodmaker has insisted it would not overpay for Cadbury. But it has also secured a $9 billion bridge loan and could use it to sweeten the cash element of its offer at a later date.

Kraft shares were down nearly 3 percent on Wednesday afternoon on the New York Stock Exchange, while Cadbury closed down 1.4 percent in London.