Warren Buffett Won't Get to Vote on Kraft-Cadbury, But May Have Something to Say Tomorrow on CNBC
Warren Buffett's Berkshire Hathaway won't be able to make good on its threat to vote against Kraft's agreement to buy Cadbury, even though Kraft had to raise its bid again to nearly $19 billion to close the deal.
Berkshire is Kraft's biggest shareholder, with a stake of over 9 percent.
Earlier this month, in a very unusual news release, Berkshire said it would vote against Kraft's proposal to authorize the issuance of up to 370 million shares to facilitate a potential deal.
The release criticized Kraft for using an "expensive currency" .. it's own stock, then trading at $27 .. for a deal. And it was taken as a signal from Buffett that he didn't want Kraft to increase its offer.
The friendly deal today, while at a higher price, has a larger cash component than Kraft's previous bids.
As our David Faber pointed out weeks ago, Kraft doesn't need shareholder approval to issue less than 20 percent of its outstanding shares. Today's deal is structured so that it doesn't require Kraft to go over that trigger, so there will be no shareholder vote. (See the clip of David's report on TV this morning for more details.)
But Buffett could still have something to say about the Kraft-Cadbury deal, and it may not be very complimentary.
We'll find out when he's interviewed by Becky Quick live in the 8a ET hour of CNBC's Squawk Box, ahead of tomorrow's special Berkshire shareholders meeting called to approve a 50-for-1 split of Berkshire's Class B shares. That split is designed to facilitate Berkshire's acquisition of Burlington Northern Santa Fe.
Current Berkshire stock prices: