The depth of the City’s disappointment at Kraft’s bid for Cadbury was emphasised yesterday as a number of big institutions and hedge funds raised their stakes in the British confectioner.

Credit Suisse, the investment bank, increased its stake from 5.99 per cent to 6.3 per cent by acquiring Cadbury shares in the aftermath of the bid. It was the second consecutive day that the bank increased its share of Cadbury, even though its shares cost about 40p more than the price implied in the £9.8 billion Kraft bid put forward on Monday.

It follows moves by John Paulson, the hedge fund billionaire, who spent about £50 million raising his stake in the Dairy Milk maker to 2.54 per cent, from 2.08 per cent on Tuesday.

Kraft has offered Cadbury shareholders 300p and 0.2589 Kraft shares per share, which at Kraft’s share price and the dollar exchange rate last night comes to about 720p a share. Cadbury shares were unchanged at 763p.

Analysts said that investors were betting on a higher bid from the maker of Dairylea, or a counterbid from another company, even though several other large consumer goods groups, including Unilever, have ruled themselves out of a bid for the Birmingham-based chocolate maker. There are still hopes for a counterbid from Hershey, of the United States.

Robin Geffen, managing director at Neptune Investment Management, which has boosted its Cadbury stake recently, said: “The current share price, which is well in excess of the derisory Kraft offer, offers good value. Asking Cadbury’s shareholders to give away the company at Kraft’s bid is about as appropriate as asking the Queen to give away the Crown Jewels for the price of a bag of chips.”

The European Commission will rule by December 14 on whether Kraft’s bid will harm competition, it also emerged yesterday.

Meanwhile, an early day motion calls for Cadbury to remain in British ownership. The motion, tabled by Lynne Jones, Labour MP for Birmingham Selly Oak, has been signed by three other members: Richard Burden, Labour MP for Birmingham Northfield; Mark Fisher, Labour MP for Stoke-on-Trent Central, and John Hemming, Liberal Democrat MP for Birmingham Yardley.

The motion “hopes that the iconic brands of Cadbury and Bournville will remain in the ownership of an innovative British company faithful to the principles of its socially responsible founder”. Ms Jones said: “People locally are very much concerned that Cadbury should remain a British company. It’s a practical issue of running British brands and having serious industry in this country.”

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