Cadbury shares edged upwards on Monday in anticipation of a higher bid from Kraft Foods, while one major shareholder, Standard Life, said Kraft needed to bid over 900 pence to get its support.
The North American food giant is expected to sweeten its original takeover offer, currently valued at 769p, before a January 19 midnight deadline, with many analysts and investors believing Kraft will have to offer 800p or above to win Cadbury.
Cadbury shares were up 1.4 percent to 804.5p by 1210 GMT (7:10 a.m. EST).
If Kraft wants to get Cadbury they need to pay a full price to get long-term shareholders on their side and that price would have to be, in my view, above 900p a share, David Cumming, head of UK Equities at Standard Life Investments told BBC Radio.
The price in the press I noticed at the weekend talking about (was) 800p to 850p -- that would not secure support from companies like ourselves, he said.
Standard Life is one of Cadbury's biggest British shareholders, with a stake of just under 1 percent.
On Friday Cadbury's second-largest shareholder, Legal & General, reiterated that the current hostile cash and shares bid from Kraft undervalues the British group..
The market is anticipating a raised bid from Kraft, which has to be finely judged to win over Cadbury shareholders but for Kraft not to be accused of overpaying, said one analyst.
Under British takeover rules, a potential rival bidder to Kraft for Cadbury that has already shown its interest, such as Hershey, has until January 23 to show its hand. Cadbury shareholders have until February 2 to decide over Kraft's bid.
Hershey is still working on a Cadbury bid to top Kraft's original offer, according to sources close to the situation, and the Wall Street Journal has reported that Hershey will likely make a bid this week of at least 800-820 pence.
(Additional reporting by Raji Menon; Editing by Rupert Winchester)
(Reporting by David Jones, editing by Will Waterman)