Kraft bid for Cadbury is too small, warns LGIM

A major Cadbury shareholder said yesterday that the US food giant Kraft would have to pay more to succeed in its hostile takeover bid for the maker of Dairy Milk chocolate.

The warning from Legal & General Investment Management (LGIM) followed efforts this week by the Kraft chief executive, Irene Rosenfeld, to win institutional support for the £10.5bn takeover. But LGIM, which owns more than 5 per cent of Cadbury's shares, said: "Our position on Cadbury is unchanged; we continue to believe the current Kraft bid does not reflect the long-term value offered by the company on a stand alone basis."

Kraft has increased the cash portion of its offer but not the overall bid, and has until Tuesday to sweeten the deal.