David Jones/Reuters

Kraft Foods turned hostile in its bid for Cadbury on Monday, making a formal but unchanged takeover offer which now triggers a bid battle for the British confectioner which could last up to three months.

The North American food giant Kraft effectively rubber-stamped the terms of its original approach, which Cadbury rejected two months ago.

Kraft's chief executive Irene Rosenfeld has reiterated her group would not overpay for Cadbury, while the British group's chief executive Todd Stitzer has said a link-up with Kraft made no strategic sense and the group has a strong future as an independent sweetmaker.

"We remain convinced of the strategic merits for both companies of combining Kraft and Cadbury," said Rosenfeld said in a formal offer statement.

Cadbury's board is set to meet to consider the bid and it is expected to give a response later on Monday. It had already rejected the unchanged terms in early September.

Kraft is offering Cadbury shareholders 300p in cash and 0.2589 new Kraft shares for each Cadbury share, unchanged from the September offer.

That values Cadbury shares at 713 pence or 9.8 billion pounds, compared with 745p a share, or 10.2 billion pounds at the time of Kraft's approach in early September.

At the UK exchanges, The share price fell sharply, reversing early gains to trade down 0.3% at 755.5 pence by 1324 GMT.

The bid for the Dairy Milk chocolate and Trident gum maker from the Oreo cookie and Velveeta cheese group was expected after the UK Takeover Panel had ruled that Kraft had to make a formal bid by 1700 GMT Monday or walk away for six months.

Cadbury is the world's second largest confectionery group while Kraft is number five with brands such as Toblerone, Cote D'Or, Terry's and Suchard, and bringing them together would pip privately-owned Mars-Wrigley to the global No 1 spot.

Kraft's move now gives it 28 days to post its official offer document to Cadbury shareholders which will then trigger the 60-day bid timetable under UK takeover rules.