Shares in Cadbury Plc
Cadbury shares had risen 1.6 percent to 806 pence by 0840 GMT (3:40 a.m. EST) after hitting an early high of 806-1/2p, compared with the current value of Kraft's cash and shares hostile bid of 769p.
Analysts and investors believe Kraft will have to offer 800p or above to win Cadbury, and the group's second-largest shareholder Legal & General on Friday reiterated that the current bid 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 UK takeover rules, Kraft has until midnight on January 19 to raise its bid, while a potential bidder that has shown interest, such as Hershey
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 Hershey will likely make a bid this week of at least 800p to 820p.
(Reporting by David Jones, editing by Will Waterman)