Cadbury Plc investor Mario Gabelli has given further encouragement to Kraft Foods Inc that a bid for the British confectioner could succeed if pitched around 820 pence.

Gabelli, whose Rye, New York-based Gamco Asset Management Inc holds a 1.05 percent stake in Cadbury largely through ADRs, told Reuters: Based on 2009 numbers, our analysts estimate that Cadbury would be worth 890 pence... But we are willing to sell at whatever price is on the table.

Within reason, of course.

Gabelli noted that some investors in the market were quoting 820 pence as an acceptable price for a sweetened bid. While that would fall short of his valuation for Cadbury that doesn't mean the buyer has to give all the synergies to shareholders, he said.

A deal structured partly with Kraft stock would also offer investors some upside in the event of a successful merger.

Cadbury has repeatedly rejected Kraft's 10.2 billion pound cash-and-shares proposal made in early September and the UK Takeover Panel has given the U.S. food group a deadline of November 9 to come up with a firm bid or walk away for six months.

Kraft's takeover proposal valued Cadbury's shares initially at 745 pence or 10.2 billion pounds but the fall in Kraft share has made it worth less as it ponders launching a higher offer for the maker of Dairy Milk chocolate and Trident gum.

Last week, in a sign that investors were beginning to put a price on the deal, a top ten Cadbury investor told Reuters a raised bid of 820 pence or 11.3 billion pounds ($18.81 billion) from Kraft certainly stacks up and would be examined very closely.

Gabelli said: Everybody will sell and kiss Irene Rosenfeld when she comes with a bid. All we want her to do is give our clients a small kiss off the deal when it was announced.

The influential investor said Gamco typically tended to take a five-year view on its investments. Cadbury shares were trading at 491.58 pence on Oct 28, 2004.

Cadbury shares hit a new high of 808.95p on Oct 21, well above Kraft's cash-and-shares offer worth currently about 722 pence, but they then have since retreated to 783.5 pence at 1321 GMT as expectations of a much higher Kraft bid recede and in the likely absence of a counter bidder.

Gamco, which has $17.9 billion in equity assets according to Thomson Reuters data, is an active fund manager and runs separate accounts for high net worth individuals, institutions and qualified pension plans.

(Editing by David Cowell)

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