Buffett opposes Kraft bid to buy Cadbury

Kraft Foods’ bid to buy chocolate maker Cadbury hit a roadblock Tuesday after Warren Buffett’s Berkshire Hathaway voted against a proposal to fund the deal by issuing millions of new shares.

Berkshire Hathaway, which is Kraft’s biggest shareholder, said the plan to issue up to 370 million new shares would “give Kraft a blank check,” allowing it to change the offer for the British chocolate maker in any way it wishes.

The statement came after Kraft said it will sell its North American pizza business to Switzerland’s Nestle for $3.7 billion and use the proceeds to improve the terms of its bid for Cadbury.

Kraft didn’t increase the overall value of its offer for Cadbury but said it will lift the cash element of the bid by around 60 pence a share.

Holders of Cadbury’s U.S.-listed shares will be entitled to the dollar equivalent of 240 pence extra cash, which is $3.88 using Tuesday’s prices.

Shares of Cadbury fell 3%. Kraft shares climbed almost 5% to $28.77.

Kennedy and Andrejczak write for NewsWatch.com Inc.