The clock is ticking on a Monday deadline for Kraft Foods Inc. to make a formal offer for British candy maker Cadbury PLC.
Kraft, which makes Oreo cookies, Nabisco crackers and its namesake cheese, on Tuesday told investors to keep an eye on its filings _ a clue that a bid may be right around the corner.
Monday is the last day permitted for Kraft to "put up or shut up," according to U.K. regulators. If Kraft doesn't make a formal bid by then, it must walk away for six months.
Cadbury spurned Kraft's cash-and-stock offer in September. It was then worth $16.7 billion. It would now be worth less because Kraft's shares have fallen in value.
Kraft previously proposed paying 300 pence in cash and 0.2589 new Kraft shares per Cadbury share, valuing Cadbury shares at 745 pence. That's below Cadbury's closing stock price of 758 pence on Friday.
Kraft first made its offer public in September, but its original proposal was made and rejected earlier in the summer. Since making the offer on Sept. 7, Kraft's shares have declined 3.8 percent, reducing the value of the stock portion of its initial offer.
Since no other competitors have emerged to bid on Cadbury, it's unlikely that Kraft right now will offer a high price, said Standard & Poor's equity analyst Tom Graves.
"I think Kraft will make an offer for Cadbury to keep the door open and follow things up with a higher offer later on," Graves said.
Some analysts speculated that The Hershey Co. could team up with Swiss food company Nestle SA to make a joint competitive offer for Cadbury, but no proposal has emerged.
Stifel Nicolaus & Co. analyst Christopher Growe expects Kraft to bid before the deadline but said in an investors note it needs to be higher to win over Cadbury shareholders, ranging from 800 pence to 850 pence a share.
Cadbury said that Kraft's offer wasn't high enough and didn't make strategic sense, but Kraft sees the deal as a chance to save costs and boost market share in both the lucrative candy business and in emerging markets.
If both companies combine, it would create a company that generates at least $50 billion in total revenue. Kraft is the largest food company in the U.S. and No. 2 worldwide to Nestle, and Nestle would still be the largest even if Kraft adds Cadbury.
Kraft reported a lower quarterly profit earlier this week because of a big one-time gain a year ago and a 6 percent decline in revenue but still lifted its yearly earnings outlook.
Kraft, which is based in Northfield, Ill., also makes Maxwell House coffee and Oscar Mayer meats, while Cadbury makes Dentyne gum in addition to chocolate.