UPDATE 2-Cadbury awaits Kraft bid deadline, shares tick up

* Kraft deadline 1700 GMT Monday for Cadbury bid

* Cadbury shares edge over 1 percent higher

(Adds further analyst comment, updates shares)

By David Jones

LONDON, Nov 9 (Reuters) - Cadbury's (CBRY.L) shares edged up by early afternoon on Monday as the clock ticked towards a 1700 GMT deadline for Kraft Foods (KFT.N) to either make a formal takeover bid for the British confectionery group or walk away.

Cadbury is the world's second-largest confectionery group, while Kraft is number five, with brands such as Toblerone, Cote D'Or, Terry's and Suchard, and bringing them together would pip privately owned Mars-Wrigley to the global top spot.

The North American food giant is expected to formalise its existing offer for Cadbury or increase it before the deadline passes, triggering a bid battle that could last for months if the formal offer is unacceptable to the British group's board.

"We see little probability in Kraft ratifying its offer and assign greater probability to a higher offer with a much larger cash component," said JP Morgan analyst Pablo Zuanic, who is looking for a final bid of 780 pence, 75 percent of it in cash.

Cadbury rejected Kraft's initial approach, which was valued at 745p a share two months ago, with only 40 percent in cash, and its shareholders have indicated a formal bid will now have to be worth above 800p a share to be considered seriously.