Bar Raised as Kraft Cadbury Bid Deadline Approaches

(MoneyWatch)  Cadbury reported higher-than-expected revenues and upgraded its outlook yesterday, potentially raising the bar for any attempted takeover bid by Kraft Foods.

Kraft made a $16.7 billion dollar offer for the British company in September, which Cadbury rejected. Cadbury then got the U.K. Panel on Takeovers and Mergers to set a November 9 deadline for an official bid, meaning that if Kraft doesn't bid on or before that date, it is forbidden from doing so for at least six months.

Cadbury's third quarter results could push up the price Kraft will have to offer to win over shareholders. But some analysts are skeptical that Cadbury can sustain its impressive improvements. While some say Kraft will now need to bid as high as 920 pence (around $15.25) per share, others have lower estimates, and one major Cadbury investor said he'd take 820 pence.

Kraft CEO Irene Rosenfeld has vowed not to overbid -- or, as she put it, not to allow the company's "animal instincts ... to take over."

And there are limits on how much Kraft can safely borrow without getting into credit rating problems.

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