Kraft Foods Inc
Nestle said it had no intention to bid for the British chooclatier, ending speculation about one potential rival bidder. Cadbury has rejected Kraft's attentions but was not immediately available for comment on Tuesday.
Kraft said it would use the full net proceeds of the $3.7 billion pizza business sale to fund a partial cash alternative to Cadbury shareholders, raising the cash portion of the deal by 60 pence a share, but keeping the overall size of the offer unchanged.
Kraft Foods is doing this because of the desire expressed by some Cadbury security holders to have a greater proportion of the offer in cash, Kraft said in a statement. Kraft added that some of its own shareholders had asked it be more sparing in its use of undervalued Kraft Foods shares in its bid.
Cadbury has rejected Kraft's offer as derisory, while investors in the company have said Kraft would need to substantially raise the bid to attract their interest.
Kraft said it will give detailed terms of the alternative by January 19, the last day Kraft is allowed to amend its cash and stock offer under a UK Takeover Panel ruling. The U.S. food maker also extended its deadline for Cadbury shareholders to accept its offer to February 2.
The Kraft offer will allow Cadbury shareholder to opt for more cash in lieu of some of the new Kraft shares they would have been entitled to receive.
The price at which Cadbury shareholders can opt for a higher cash portion will be set as the market price of Kraft shares, translated into pounds sterling, at the close of business the day before Kraft announces the detailed terms of the cash alternative.
(Reporting by Michele Gershberg; Editing by Hans Peters and Andrew Callus)