Cadbury agrees £11.5bn Kraft takeover

Cadbury is poised to be taken over by US food conglomerate Kraft after its board approved a new increased bid.

Cadbury's board will advise its shareholders to accept a new offer of 840p a share - valuing the company at £11.5bn.

Kraft's offer is far improved on the £9.8bn hostile bid last year, while the group is also offering a 10p per share dividend for Cadbury shareholders.

The offer consists of 500p in cash, with the rest made of Kraft shares. Kraft will borrow £7bn to finance the deal.

"The boards of Kraft Foods Inc. and Cadbury plc confirm that they are finalising the terms of a recommended offer for Cadbury plc," a joint statement reads.

David Cumming, head of UK equities at Standard Life Investments, which has a holding in Cadbury of under 1%, comments: "We are supportive of the management's decision although the achieved price is slightly light of our stated target."