Warren Buffett's Berkshire Hathaway Inc. (BRK-A,BRK-B) Tuesday said it voted "no" on Kraft Foods' proposal to authorize the issuance of up to 370 million shares to facilitate the acquisition of Cadbury Plc (CBY,CBRY.L), as it believes that the Kraft share is a very expensive "currency" to be used in an acquisition.
''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,'' the company said in a statement.
Kraft has offered to acquire Cadbury for 300 pence cash and 0.2589 new Kraft shares for each Cadbury share, which Cadbury has rejected.
Kraft said earlier today that it would sell the assets of its North American pizza business to Nestle (NSRGY.PK, NSTR.L) for a total consideration of $3.7 billion and would use the net proceeds to increase the cash portion of the offer to Cadbury shareholders. Kraft said it would announce the details of this offer by January 19, which is the last day for it to amend the terms of the offer. Kraft also said it would extend the acceptance period for Cadbury security holders to tender their shares to February 2 from January 5.
Berkshire said today that it believes that 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 $3.6 billion to repurchase shares at about $33 per share, presumably because the directors and management thought the shares to be worth more,'' the insurer added. Berkshire asked if the Kraft board now believes those purchases were a mistake and that Kraft's true value is only the current price of $27 per share.
Adding that when an acquisition is being evaluated, the true business value of what is given is as important as the true business value of what is received, Berkshire urged all shareholders to use this yardstick in deciding how to vote. A shareholder voting "yes" today is authorizing a huge transaction without knowing its cost or the means of payment, Berkshire said.
Considering its own holdings and those of its pension funds, Berkshire believes that the 138.27 million Kraft shares it owns, about 9.4% of the total outstanding, make it the company's largest shareholder.
Berkshire said if it concludes by January 19, by which date Kraft has to announce its final offer, that the offer does not destroy value for Kraft shareholders, it will change its vote to "yes."
Berkshire further said it believes that at this time no shareholder should vote "yes" when ''he can't possibly know what he is voting for.''
BRK-A is currently trading at $99,619.70 up $19 on a volume of 200 shares.
BRK-B settled at $3,311, up from the prior close of $3,286, on 3.15 million shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.