Buffett warns Kraft over Cadbury pursuit

Warren Buffett has weighed into Kraft's hostile takeover bid for Cadbury, warning the US giant not to use too much of its stock to finance the proposed £10.4bn deal.

Buffett's Berkshire Hathaway, is the largest shareholder of Kraft at 9.4%, says it will vote against the US group's proposal to issue 370m shares to pay for the deal. The statement follows Kraft's $3.7bn sale of its North American pizza business to Nestlé, a move to add more cash to the Cadbury deal. "Kraft stock, at its current price of $27, is a very expensive ‘currency' to be used in an acquisition. In 2007, in fact, Kraft spent $3.6bn to repurchase shares at about $33 per share, presumably because the directors and management thought the shares to be worth more," Berkshire says. ...