Kraft needs to pay more to win the golden ticket to Cadbury’s chocolate factory; the problem is it may struggle to do so. Kraft’s shares were down nearly 6 per cent at Tuesday’s market opening but it will need to raise both the total value and cash component of its 745p-per-share offer. Cadbury’s institutional UK shareholders are at best leery of receiving Kraft shares, which make up 60 per cent of the proposed deal. They suffered last year when Cadbury demerged its soft drinks arm into a US-listed company whose share price sank as UK holders dumped the stock.

Kraft’s offer would take its debt to more than three times earnings before interest, tax, depreciation and amortisation. Raising the offer materially could threaten its investment-grade credit rating – which it wants to preserve – or force it to raise more equity, diluting Kraft shareholders.