Kraft has been playing a long-game since it began its unrequited pursuit of the British chocolatier in early September, formalizing its indicative offer on November 9 and betting that a rival would not emerge to push it into a bidding war.
The company has until December 7 to post its documents to shareholders and then 60 days to persuade them to accept its bid -- which currently values Cadbury at 9.8 billion pounds ($16.24 billion) or 716 pence a share -- under UK takeover rules.
Any improvement to the offer must be made within 46 days of posting the offer documents. If shareholders reject Kraft's final bid, the group cannot launch another unsolicited approach for a year unless someone else makes an offer.
Two analysts said it would make little difference to the takeover saga if Kraft posted its documents this week rather than Monday, assuming the company did not make any significant changes to the value or the structure of the bid.
It might put Cadbury under a bit of time pressure with its defense document, but it would only gain Kraft a few days, one analyst said.
There would be no point Kraft changing the offer until some one else shows their hand, the analyst added.
Cadbury has two weeks to publish its defense once Kraft has posted its documents.
Chief Executive Todd Stitzer said Cadbury intended to use its ethical credentials as an important plank of its defense in an interview on Wednesday with the Guardian newspaper. He also expressed a preference for U.S. chocolate-maker Hershey as a potential buyer if the company was eventually to do a deal.
A banker, who is not advising Kraft, Cadbury or Hershey, said Hershey may decide to adopt Kraft's long-game tactics.
I can't see Hershey revealing its hand too early. The uncertainty about what it may or may not do is helping to keep Cadbury's stock price over 800 pence a share, making a possible deal harder and more expensive for Kraft, the banker said.
The banker added that Hershey would probably pursue a friendly deal with Cadbury, which would need to be priced comfortably above 800 pence a share.
Cadbury may feel more comfortable embracing Hershey, but a slew of potential obstacles could make the U.S. chocolate company a lesser choice in the eyes of Cadbury investors.
Hershey is considering launching a bid of at least $17 billion for Cadbury, a source familiar with the matter told Reuters previously, adding that the situation was still fluid.
Hedge fund broker Churchill Capital said it did not think Hershey could outbid Kraft on its own and that it saw a joint bid with Italian chocolate maker Ferrero as logical but fraught with risk.
Hershey and Ferrero have held preliminary talks about a joint bid, a source said last month.
It does not surprise us that Hershey may be looking for a partner or new equity investors to assist in a bid for Cadbury, Churchill said. But a break-up bid comes with a lot of uncertainties.
Hershey and Ferrero might be interested in the same (Cadbury) assets and even assuming both companies can leverage themselves to four or five times net debt to EBITDA (earnings before interest, taxes, depreciation and amortization), there would still be a funding gap of around $7 billion to $10 billion.
Andrew Wood at Sanford Bernstein said Kraft was still the favorite to take over Cadbury despite interest from others.
Kraft is still the favorite to get the deal done.... but not at the 'steal' it had originally hoped, the top-rated analyst said in a note this week. (Additional reporting by David Jones; Editing by Sharon Lindores)