Warren Buffett: ‘I’ve got a lot of doubts’ over Cadbury deal

Thrugelmir

Investment heavyweight Warren Buffett is the highest profile investor yet to express his concerns about Kraft's proposed acquisition of Cadbury.
The Berkshire Hathaway founder, who owns a 9.4% stake in the US food giant, told US news channel CNBC 2 that if he had a chance to vote on the proposed deal for Cadburys he would vote against the takeover.
Buffett said he believed Kraft was 'issuing a bunch of stock at a cheap price' and was 'paying a very full price' for the UK chocolate maker, adding that he believed Kraft's shares were still 'significantly undervalued, making them 'expensive currency to use in a takeover.'
Buffett was also highly critical of Kraft's decision to sell its 'very fine' pizza business to rival Nestle, saying the deal was handled in an 'enormously tax-inefficient way and that while the headline sale price was $3.7 billion, Kraft was only receiving $2.5 billion.
On Kraft's proposed deal for Cadbury, which values the UK firm at £11.9 billion, he was reported as saying: 'I've got a lot of doubts about the deal. If I had a chance to vote on this, I'd vote no.'
The comments come as ratings agency Fitch downgraded Kraft's senior unsecured debt from BBB to BBB- following its £11.9 billion (USD 19.4 billion) recommended final offer for Cadbury on consideration of the increased debt of a combined Kraft and Cadbury.
The downgrade to BBB- , was also applied to Kraft's issuer default rating (IDR), and its credit facility, while Fitch also downgraded Kraft's Short-term IDR and its commercial paper to 'F3' from 'F2'.
Fitch said: 'The board of Cadbury unanimously recommended that Cadbury security holders accept the terms of this offer. While there is the potential for additional competing bids for Cadbury until Jan. 23, 2010, the rating actions are based on Fitch's expectation that there is a high likelihood that the acquisition will be consummated on terms reflected in today's offer.

Anybody want to buy my Kraft shares?