NESTLE, one of York’s biggest private employers has denied that it is interested in taking over its UK rival Cadbury, but its actions may hasten the takeover of the firm by US food giant Kraft.

Kraft, which closed down Terry’s plant in York to move production to Eastern Europe in 2005, has already stepped up its pursuit of Cadbury today by pledging to sweeten the cash part of its £10 billion takeover offer.

To finance the revised offer, Kraft is selling its North American frozen pizza business to Nestlé for $3.7 billion (£2.3 billion).

Meanwhile, Nestlé has scotched speculation that it was preparing to make its own offer for Cadbury.

The prospect was fuelled on Monday, when Nestlé raised more than £17 billion from the sale of its 52 per cent stake in the world’s largest eye care group, Alcon, to health care firm Novartis.

But Nestlé plans to use some of the cash to extend its share buy-back programme by another $10 billion (£6.2 billion) over the next two years.

It is currently in the process of returning $25 billion (£15.5 billion) to shareholders.

Paul Buckle, Nestlé chief executive, said the sale would enable Nestlé to concentrate on “accelerating” its development as the world’s leading nutrition, health and “wellness”

company.

Kraft said it would give further details of its alternative Cadbury takeover proposal by January 19, the last day under takeover rules that it is allowed to amend its offer.

The US firm also said it had extended yesterday’s deadline for Cadbury shareholders to accept its takeover offer to lunchtime on February 2.

Kraft’s original offer was for £3 per Cadbury share, plus 0.26 new Kraft shares, although it now plans to increase the cash element by 60p a share in order to meet the concerns of Cadbury shareholders.