Kraft Heinz backer Warren Buffett has ruled out a second tilt at Unilever and quashed rumours that the food conglomerate’s next target is a reunification with Mondelez.
The veteran investor told reporters in the US that the Kraft Heinz £115bn shock offer to buy Unilever earlier this year was not intended to be a hostile approach.
Buffett said in a television interview on CNBC that the perceived aggressive bid was a “misunderstanding”. “We will not make hostile takeover offers, and we did not intend that to be hostile,” Buffett added.
“But it turned out it was, and we immediately — the next day when I learned about it — we called it off. It was a misunderstanding.”
Kraft Heinz informed the market in February that it had made a bid for the Persil and Ben & Jerry’s, which was immediately rejected by Unilever in a no-nonsense statement that said the $50-a-share offer undervalued the company.
The US group did not table another offer and walked away before the takeover attempt entered fully hostile territory. The deal would have been the biggest-ever takeover of a British company.
Rumours have been rife ever since on Kraft Heinz’s next target, with many analysts putting Cadbury owner Mondelez at the top of the list.
Mondelez was created in 2012 in a spin-off from Kraft Foods to create two independent companies, with Cadbury and other snack brands moving over to Mondelez.
However, Buffett, whose Berkshire Hathaway partnered with private equity firm 3G Capital in 2015 to merge Kraft and Heinz, poured cold water on any potential deal to bring the two companies back together.
The Sage of Omaha was asked if Kraft Heinz would be interested in buying Mondelez on CNBC’s ‘Squawk Alley’. “I think the answer is no on that,” he said.
Buffett also added that buying Mondelez would not help Kraft Heinz in negotiations with under pressure retailers such as Walmart as they battle the threat from Amazon and Whole Foods.
“That doesn’t really help you that much in the fight,” he said.
Shares in Mondelez slumped more than 4% as Wall Street responded to Buffett’s interview, before clawing back some of the losses in later trading. The stock is currently down almost 2% to $40.85 in early trading on the NASDAQ today.