UPDATE 2-Italy's Ferrero rules out bidding for Cadbury

* Ferrero rules out bid for Cadbury

* Hershey already out of running

* Kraft outlines cash alternative (Adds details of Kraft cash alternative)

LONDON, Jan 25 (Reuters) - Italy's Ferrero has ruled out a rival bid for Cadbury Plc CBRY.L, clearing the way for Kraft Foods (KFT.N) to complete its 11.7 billion-pound ($18.9 billion) proposed takeover of the British confectioner.

Fellow chocolate maker Hershey (HSY.N) said on Friday it had no intention of bidding for Cadbury, so with Nestle (NESN.VX) already ruled out, Kraft appears on course to complete its recommended bid by the deadline of Feb. 2. [ID:nLDE60L1K7]

"Further to its announcement of November 18, 2009, Ferrero International SA confirms that it does not intend to make an offer for Cadbury," the Italian group said in a statement on Monday.

Last week Kraft agreed a cash and shares deal that at the time valued Cadbury shares at 840 pence, with Cadbury shareholders also promised a 10p a share dividend.

Potential bidders Hershey and Ferrero, which had both said on Nov. 18 they were considering bids for Cadbury, were given until 0700 GMT on Jan. 25 either to come up with a fully financed bid or withdraw.

Shareholders in Cadbury have until 1300 GMT on Feb. 2 to accept the Kraft offer, and with the deal already recommended by the Cadbury board and no obvious rival bidders seen entering the battle, analysts expect the Kraft takeover to go through.

In a separate announcement, Kraft said Cadbury shareholders who elect to receive extra cash under a mix and match facility will receive 799p rather than the current 827p under the cash and shares offer, and 3,195p per Cadbury ADS compared to 3,308p. ($1=.6202 pounds) (Reporting by David Jones; Editing by Greg Mahlich/Will Waterman)