Kraft Could Launch Hostile Bid for Cadbury

NORTHFIELD, Ill. (TheStreet) -- Kraft Foods(KFT) is readying a hostile bid for Cadbury(CBY), valuing the British confectionery business at about 11 billion pounds ($17.4 billion pounds), a report says.

Britain's takeover panel is preparing this week to establish a deadline for Kraft to put a firm offer on the table or walk away for at least six months, reports the U.K.'s Observer newspaper.

Kraft is putting the final touches on a financing package that will allow it to offer about half the consideration in cash, the Observer adds, with the rest in Kraft stock.

City sources, the Observer reports, say Kraft could bid 800 pence a share, which could rise to 850 pence as the bid battle reaches its climax over the 60-day limit set by the panel for takeovers.

Kraft earlier this month made a bid of $16.7 billion Cadbury, which the U.K. confectionary company has dismissed as too low. But in an interview last week with the Wall Street Journal, Cadbury CEO Todd Stitzer said a tie-up with Kraft could make "some strategic sense."

-- Reported by Joseph Woelfel in New York .

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