The growing share of Cadbury held by hedge funds betting that Kraft will raise its $16.2bn (£9.8bn) offer for the UK confectioner is increasing the likelihood that Kraft’s hostile bid will succeed, say brokers. Towards the end of the bid battle, so-called merger arbitrageurs – now estimated to control 14% of Cadbury’s share register – could own more than a quarter of Cadbury’s stock, potentially shifting the outcome in Kraft’s favour. New York-based hedge fund Paulson & Co bought Cadbury shares for the second day on Wednesday, bringing its stake to 2.54%.

This entry was posted by Gwen Robinson on Thursday, November 12th, 2009 at 4:58 and is filed under Capital markets, Hedge funds, M&A. Tagged with Cadbury, kraft, Paulson & Co. Edit this entry.