Warren Buffett yesterday unexpectedly marched into the takeover battle for UK confectioner Cadbury, telling Kraft it should not use too much of its stock to finance the £10.7bn ($17.1bn) hostile deal.
The intervention by the billionaire investor came as the US group said it would increase the proportion of cash in its existing offer for Cadbury from the proceeds of a $3.7bn sale of its North American pizza business to Nestlé. Mr Buffett's Berkshire Hathaway investment group is Kraft's largest shareholder with a 9.4 per cent stake.
Nestlé also formally said it had no interest in bidding for all or part of Cadbury, which combined with Mr Buffett's comments to narrow the bid premium between Cadbury's share price and Kraft's offer to just over 2.7 per cent, from almost 10 per cent on Monday. Although Mr Buffett's comments initially sent Cadbury's shares lower on fears that they could derail the bid, some shareholders suggested it could in practice help Kraft clinch the deal.
