As Nestle SA ruled itself out of bidding for Cadbury Plc., Kraft Foods Inc. bolstered its pursuit of the UK candy maker by raising the cash component of its 10.6 billion-pound ($17 billion) offer.

After requests from some shareholders, Kraft said Tuesday it would sell a pizza business to Nestle and use all the net proceeds from the $3.7 billion sale to raise the cash part of its bid for Cadbury, the maker of Dairy Milk chocolate.

Martin Deboo, an analyst at Investec in London, said, “Nestle held the key to a competitive auction for Cadbury which would’ve driven the price up. Kraft have purchased their silence and made their own offer marginally more attractive in the process.”

The sale may hinder the chances of a successful bid by Ferrero SpA and Hershey Co., which analysts had been speculating might team up with Nestle or others to make an offer. As the chances of a bidding contest receded and the overall value of Kraft’s current bid remains the same, Cadbury fell as much as 2.4 percent in London trading.

(article source: BusinessWeek, image source: Telegraph)