"There is an obvious come-back to our change of recommendation: the possibility of Cadbury falling prey to a bid," Citigroup wrote in a note.
The Kraft rumors started in April when UBS analyst David Palmer said the Northfield, Ill., food giant would be a logical bidder.
"This is something we cannot rule out, but on balance we believe is unlikely in the near term," Citigroup said.
Kraft owns the Oreo, Nabisco and Chips Ahoy Brands of cookies, but lacks candies.
"If Kraft wants to become bigger internationally, buying Cadbury would do that," Palmer said.
At the time, Hershey Co. also came up as another rumored Cadbury buyer. Right now, however, Hershey making acquisitions seems unlikely as it's been the subject of takeover rumors itself. Earlier this week, the London Daily Telegraph reported that Hershey could sell a 25% stake to Nestle SA. Those rumors have been played down as well since its majority shareholder, Hershey Trust, still insists the company is not up for sale. - Demitri Diakantonis
As rumors of Kraft Foods Inc. interest in adding Cadbury plc to its cupboard of brands heats up, Citigroup Inc. downgraded its rating on the English confectionery. 
