Cadbury Shares Rise on Merger Speculation

Cadbury's share price is rising as rumors of a bigger offer from Kraft arise. (Leon Neal/AFP/Getty Images )

Shares of Cadbury Plc rose on Monday on the London Stock Exchange as rumors swirled that Kraft Foods Inc. would increase its offer price beyond its current offer of 771 pence (US$12.60) per Cadbury share.

Shares of Cadbury were up 11.50 pence, or 1.5 percent, to 805.00 (US$13.15) in London on Monday. U.S. markets were closed in observance of Martin Luther King, Jr.’s birthday.

Over the weekend, reports speculated that Kraft was readying a new offer of at least 800 pence ($13.07) per Cadbury share to win over new investors as well as to stave off a possible bid by rival chocolate maker Hershey Foods Inc.

On Monday, Cadbury shareholder Standard Life Investments said that Kraft would need to increase its offer to more than 900 pence ($14.70) per share to win over long-term investors.

“If Kraft want to get Cadburys they need to pay a full price to get long-term shareholders ... and that price would have to be, in my view, above 900 pence a share,” David Cumming, head of equities at Standard Life, said on BBC Radio on Monday.

If Hershey wants to join the race, it has until the end of the week to submit a rival bid.