Page last updated at 08:10 GMT, Tuesday, 5 January 2010

Nestle rules out takeover bid for Cadbury

A Cadbury Diary Milk
Cadbury is the subject of a hostile takeover bid from Kraft Foods

Food giant Nestle says it does not intend to table a takeover bid for Cadbury, despite recent speculation.

Nestle had been linked to a possible offer following Kraft Food's hostile bid for Cadbury, announced in December.

Separately, Kraft has announced it will increase the proportion of cash in its offer to Cadbury shareholders in order to make its bid more attractive.

Kraft will use cash made from the sale of its north American pizza business - sold to Nestle for $3.7bn (£2.3bn).

More cash

The sale means Kraft will be able to offer an extra 60p per share in cash, though the overall value of the offer is not being increased.

The company will announce full details of its new offer before 16 January.

Kraft's original bid was £3 plus 0.26 new Kraft shares for each Cadbury share - a deal that analysts said would be unlikely to tempt shareholders.

The Cadbury board has launched a fierce defence against the Kraft bid, calling it "derisory" and arguing it undervalues the business.

Nestle was among the possible rival bidders expected to enter the fray.

On Monday, that speculation was fuelled when Nestle sold its remaining stake in eye-care group Alcon to Novartis for $28.1bn (£17.5bn) - a deal perceived as freeing up cash for a Cadbury bid.

However, on Tuesday it instead spent some of that money buying Kraft's frozen pizza business, which sells brands including DiGiorno and California Pizza Kitchen in the US and Canada.

In a statement, Nestle said its decision not to make, or participate in, a formal offer for Cadbury followed discussions with the UK Takeover Panel - the body in charge of regulating takeovers.

That leaves Kraft as the only current bidder for Cadbury, although the UK confectioner says it has been in talks with US company Hershey about a possible deal.

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This is Money Buffett slams Kraft over Cadbury bid - 1 hr ago
CNN Buffett against Kraft's Cadbury bid - 8 hrs ago
Los Angeles Times Buffett opposes Kraft bid to buy Cadbury - 8 hrs ago
The ScotsmanKraft sweetens Cadbury deal after agreeing surprise sale to rival Nestl - 9 hrs ago
Philippine Daily Inquirer With pizza cash, Kraft sweetens bid for Cadbury - 11 hrs ago
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