Berkshire Hathaway slams Kraft bid for Cadbury
06 Jan 2010
Berkshire Hathaway Inc, owned by billionaire investor Warren Buffett has slammed Kraft Food's proposed expensive acquisition of Cadbury and voted against Kraft's proposal to issue new shares for the takeover.
Berkshire Hathaway, the investment vehicle of Warren Buffett has voted "no" on Kraft's proposal to authorise the issuance of up to 370 million shares to facilitate the acquisition of Cadbury.
In a scathing public statement, Berkshire said that the share-issuance proposal, if enacted, will give Kraft a blank check allowing it to change its offer to Cadbury - in any way it wishes - from the transaction presented to shareholders in the proxy statement.
''And we worry very much that, indeed, there will be an additional change from the revision announced this morning,'' Berkshire added in the statement issued yesterday.
After Berkshire voting ''no'' to Kraft's proposal to authorise the issuance more shares, Kraft did indeed revise its original September offer by hiking the cash component of the offer to 60 pence per Cadbury share in cash, but kept the overall size of the offer unchanged.
By hiking the cash component in its offer, the Northfield, Illinois-based Kraft will be paying an additional $1.3 billion over the $16.7 billion original offer taking the total cost of the takeover bid to $18 billion.