Wednesday, January 20, 2010

Buffett Doubts Kraft-Cadbury Deal; Kraft Shares Slide

. Wednesday, January 20, 2010

By stockOzone team

Billionaire Warren Buffett on Wednesday voiced his unhappiness over Kraft Foods' (NSYE: KFT) proposed 19.5 billion dollar acquisition of Cadbury (CBRY.L), giving a fresh twist to the buyout saga.

Buffett-led conglomerate Berkshire Hathaway is a top shareholder in US-based Kraft, holding 9.4 per cent stake.

In an interview to television channel CNBC (see the text, video) , Buffett said that he has a lot of doubts about Kraft's proposed buyout of Cadbury.

The billionaire investor also noted that he "feels poor" in the wake of the deal.

In early trading, shares of Kraft fell more than two per cent to USD 28.75 on the New York Stock Exchange.

Yesterday, Kraft said it would takeover the British confectioner in a cash-and-stock deal valued at 11.9 billion pounds, ending months of bitter battle between the two companies.

Earlier, Berkshire Hathaway had opposed Kraft's move to issue up to 370 million new shares to facilitate the acquisition of Cadbury.

The conglomerate had said that Kraft stock is a very expensive currency to be used in an acquisition.

Disclosure: Author does not own any of the stocks discussed here.

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