Cadbury shareholders have signalled that they will hold out for at least an 800p-a-share offer from Kraft, the US food giant, which made a 715p-a-share offer yesterday.

The formal offer is the latest in a bid saga that could rumble on for months. Kraft has committed to paying $70 million (£41.8 million) to its banks for a $9.2 billion lending facility to make the purchase. The nine banks that have agreed to back the deal include HSBC, Barclays, Citigroup and Deutsche Bank. It is also paying substantial fees to Lazard, its lead adviser on the deal.

It is understood that Kraft will not post its offer document to Cadbury shareholders for at least two weeks. The confectioner will then have a fortnight to put together documents defending itself against the bid.

Many observers had expected Kraft to improve the terms of its informal offer of 745p a Cadbury share; however, it submitted a bid on exactly the same terms — 300p and 0.2589 Kraft shares for each Cadbury share — as its initial approach.

The proferred terms are worth less to Cadbury shareholders because Kraft’s share price has fallen and sterling has strengthened against the dollar in the two months since the offer was mooted. It was suggested yesterday that the lack of sweeteners in the bid was calculated to smoke out other potential bidders. In spite of speculation about counter-bidders, no other parties have expressed an interest in the confectioner.

Cadbury is thought to be considering formulating a “poison-pill” deal with Ferrero, the maker of Ferrero Rocher, if Kraft comes back with an offer that proves more attractive to shareholders. Ferrero is understood to be monitoring the situation closely. Hershey is believed to be interested in making a bid but it may not have the capital to take on Kraft.

Other potential contenders, including PepsiCo and Nestlé, are believed to have decided against making a bid.Unilever has ruled itself out publicly. Leading shareholders in the British chocolate maker, which produces Dairy Milk and Crunchie bars, said yesterday that Kraft would have to come up with a better offer to persuade them to part with their Cadbury shares.

UK investors are particularly concerned about the cash element of the bid, because many are not permitted to own American shares. One leading UK institutional investor in Cadbury said: “If they are really serious, they need to pay more. They certainly need to increase the cash component — our funds cannot hold US shares. I think we would need to see at least another £1 a share in cash on top of the current proposal.”

Roger Carr, the Cadbury chairman, dismissed Kraft’s proposal as a “derisory offer”. There is pressure on the Cadbury management team to devise a strategy that will guard against shareholders being seduced by Kraft.

A leading investor said: “Cadbury’s is an OK story but they do need to come up with something: a round two of margin targets and a second three-year plan. This is not a management team that is particularly highly regarded. There is more for them to deliver.”

Martin Deboo, an Investec analyst, said: “Kraft look to have opted for a long and patient siege over immediate shock and awe. We expect the bid to be raised, but struggle to reconcile an offer of much more than £8 with Kraft’s published criteria. We think that Cadbury are holding plenty of cards but will need to think hard about how they convince investors that their current robust progress is sustainable.”

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