Hedge fund Paulson raises Cadbury stake again

11 November 2009 @ 01:20 pm EDT

Hedge fund billionaire John Paulson raised his firm's stake in Cadbury on Wednesday and now holds 2.54 percent of the British confectioner, the subject of a hostile bid by U.S. food group Kraft.

Cadbury's chocolate bars are seen in a shop in London September 7, 2009. Kraft Foods said it was determined to pursue Britain's Cadbury, which soared in value after it snubbed a $16.7 billion bid from the U.S. group, reinforcing hopes of a broader-based pick-up in merger activity.

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Paulson became the industry's highest-paid manager in 2007 by betting that U.S. house prices would fall. His firm Paulson & Co now holds 34.9 million shares in Cadbury, a British regulatory filing showed on Wednesday.

On Tuesday, Paulson doubled the stake in Cadbury to 2.08 percent, buying 14.8 million shares.

Kraft on Monday took its $16.2 billion offer straight to shareholders, refusing to sweeten its bid price, and setting the stage for a takeover battle that could take months.

At current values, Kraft's cash-and-share offer is worth 720 pence per Cadbury share, well below the British group's share price of around 763 pence.

(Reporting by Douwe Miedema)

Hedge fund Paulson raises Cadbury stake again

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