Billionaire investor Warren Buffett has urged Kraft to keep its head when it weighs up its final bid for Cadbury.
Buffett, who owns a 10% stake in the US food group, said yesterday (5 January) that he would oppose Kraft’s plan to issue up to 370 million shares to boost cash reserves for its hostile takeover of Cadbury.
The statement, issued through Buffett’s Berkshire Hathaway holding company, comes with Kraft set to finalise its bid by January 19.
“To state the matter simply, a shareholder voting ‘yes’ today is authorising a huge transaction without knowing its cost or the means of payment,” the statement said. However, the statement also conceded it would consider changing its vote to ‘yes’ once Kraft announced the terms of its final offer.
In September, Buffett said that Kraft’s undervalued stock meant its opening offer was its “full price” for Cadbury and a line should drawn under the bid.
Buffett has been at the heart of some of the world’s biggest corporate deals and ten years ago used his influence to help torpedo Coca-Cola’s planned tie-up with Quaker Oats.
Meanwhile, Kraft this morning announced that shareholders representing 1.5% of Cadbury’s share capital had already accepted yesterday’s offer.