Kraft to formalise hostile Cadbury bid on Monday: Sources

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Kraft Foods is expected to formalise on Monday a hostile takeover bid for Britain's Cadbury valued at rougly 10.2 billion pounds (USD 16.7 billion), sources said.

Cadbury previously rejected Kraft's informal offer two months ago, which was worth 745 pence a share, saying it made no strategic or financial sense. Cadbury's stock closed on Friday at 758 pence. Still, Kraft was not expected to materially change its offer, sources said.

Kraft planned to press ahead and make its offer directly to Cadbury shareholders on Monday, meeting a deadline set by the UK Takeover Panel to formalise its offer or walk away, the sources said.

"Monday will start the official process," said one source. "It's just a starting point," said the source, saying that Kraft could increase its offer down the road.

Kraft's move to formalize its bid starts a 28-day clock to send the offer documents to Cadbury's shareholders. When investors receive this information, a standard 60-day offer period kicks in. Kraft declined to comment.

Cadbury's board was expected to meet on Monday to weigh Kraft's offer, according to media reports. A Cadbury spokeswoman, asked to comment by Reuters on media reports, reiterated the company's opposition to being bought by Kraft.

"While Kraft might need Cadbury, Cadbury certainly does not need Kraft," the Cadbury spokeswoman said.

The bid -- at the same price or only slightly offer than its previous offer -- reflects Kraft's promise that it would not overpay for the British group best known for its Dairy Milk chocolate.

Kraft, the maker of Velveeta cheese and Oreo cookies, believed from the start that there were no rival bidders who would push the bidding price higher. Although a new suitor could still emerge, Kraft's tight bid shows it still sees no competition for Cadbury's hand.

A deal would create the world's largest confectioner, ahead of privately held Mars Inc. It would put into US hands a company that has been a British icon and corporate symbol of industry and philanthropy, a fourth-generation member of the founding family said. Felicity Loudon said she identified Kraft with "plastic cheese on hamburgers."