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Chocolate Wars Getting Sticky

It appears the chocolate wars are heating up once again, with Kraft making a bold new move in an attempt to win Cadbury .

Specifically, Kraft announced plans to sell its frozen pizza business for $3.7 billion to Nestle; that includes brands such as DiGiorno, Tombstone and California Pizza Kitchen.

The move was presumably made so Kraft can sweeten its offer for Cadbury.

Although the sale may have been intended as a sign of strength, one major shareholder was anything but impressed. Warren Buffet, Kraft's biggest shareholder, warned he may vote against the deal if he feels Kraft is overpaying.

What must you know about these developments?

I think Warren Buffett’s comments make the Kraft deal more likely, muses Karen Finerman. He’s sending a message that Kraft doesn’t have limitlessly deep pockets.

Whiitney Tilson of T2 agrees. During an earlier CNBC interview he said, Buffett is sending an important message not only Cadbury's board but Cadbury's shareholders. He's saying not a penny more. You've already been offered a fair price.

Remember Buffett is okay with the deal as its currently being offered, adds Tilson.

Now I think we see Kraft say this is our best and final offer. And at the end of the day I think Cadbury takes it.


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