**Kraft Foods may increase its bid for Cadbury to a level that is accepted by the UK chocolate-maker, 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 Cadbury at £11.7bn.
Kraft launched its hostile takeover bid for Cadbury in December, having its previous offer of 761p rejected.
Shares in Cadbury ended Monday trading up 14 pence or 1.8% to 807.50p.
Losing independence
Our correspondent said it now seems “highly likely” that Kraft and Cadbury will agree a deal that will probably be announced at 0700 GMT on Tuesday.
A deal between the two companies would end the intense animosity between the companies that has been manifested since Kraft announced its desire to own Cadbury last autumn.
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.
But if Cadbury’s board recommends Kraft’s bid, it means that the company will be taken over.
Negotiations between Cadbury’s bankers and Kraft’s bankers are taking place overnight.
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.