City has the taste for a Cadbury sweetener

Hopes for a sweeter takeover offer for Cadbury were being chewed over in the City today as the rebuffed shock bid from Kraft fell further behind what investors think the chocolate giant is worth.

Takeover tittle-tattle continued to buoy Cadbury shares as the chief executive of its American stalker vowed to be back with proposals for Cadbury directors.

Kraft chief executive Irene Rosenfeld said at a speaking engagement in Toronto overnight: "In the weeks ahead, we look forward to engaging in constructive dialogue with the board and management of Cadbury."

There was speculation in New York that Kraft could afford to sweeten its bid, tabled last week, by raising money through the sale of assets including its coffee brand Maxwell House.

What is certain is that Kraft's original £10 billion cash-and-shares offer has increasingly turned sour.

A fall in Kraft's own stock price values its offer for Cadbury - about a quarter of one of its shares for one Cadbury share plus 300p in cash - at 716p a share.

A 2½p rise in Cadbury's stock today to 789p means that the value of Kraft's offer languishing at a discount of almost 10%.