Digest

Warren Buffett opposed Kraft-Cadbury merger

Wednesday, January 6, 2010

MERGERS & ACQUISITIONS

Buffett worked against Kraft-Cadbury deal

Warren E. Buffett opposed Kraft's $16.8 billion hostile offer for Britain's Cadbury as a threat to shareholder value, undermining the U.S. foodmaker's attempt to woo investors with a sweeter bid.

Kraft chief executive Irene Rosenfeld had sought to grab Cadbury investors' attention by raising the cash portion of the bid Tuesday. But the rare intervention by Buffett a few hours later showed that she has yet to win over Kraft's largest shareholder and one of the world's most admired investors, as well as giving Cadbury new ammunition in its defense.

Buffett's Berkshire Hathaway said in a statement that it was voting against Kraft's proposal to float 370 million shares to fund the Cadbury bid while the company's stock remains undervalued, calling it a request for a blank check from shareholders. Berkshire holds 9.4 percent of Kraft. Berkshire said it could reconsider its vote if convinced the bid does not destroy shareholder value. Kraft could also ultimately offer fewer shares.

Buffett is on The Washington Post Co.'s board of directors.

-- Reuters

DEBT

Late credit card bills at record high

Delinquent balances on credit cards reached record levels and defaults surged higher in December, analysts with Fitch Ratings said in a report.

The rate for payments more than 60 days delinquent reached an all time high, 4.54 percent, for the December index, which is based on data through the end of November. The rate surpassed the previous high of 4.45 percent, set in June.


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