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Bill Radke: Kraft Foods submitted a new takeover offer this morning for the British goody maker Cadbury. This is not to the liking of a very influential Kraft shareholder. Billionaire Warren Buffett’s company, Berkshire Hathaway, says it’s voting against the deal. Also voting against the deal: Cadbury’s executives. They basically told Kraft, “Yes, we know you have a lot of cash now, you just sold your Tombstone frozen pizza business to Nestle for billions of dollars, but we still don’t like your offer.” Marketplace’s Christopher Werth picks up the story from London.
Christopher Werth: Kraft is expected to use the proceeds from this sale to increase its offer for the British chocolate maker, Cadbury, which currently stands at $17 billion.
Jon Cox is with Kepler Capital Markets. He says this is an indication of just how serious Kraft is.
Jon Cox: I think the tide is really changing in Kraft’s favor. Now in the next couple of weeks, they can still increase their offer to get a deal done.
For Nestle, buying Kraft’s U.S. pizza business could be a good move. The U.S. market is worth $37 billion a year. Nestle will get DiGiorno and Tombstone brands. Given the recession, analysts expect frozen pizza sales to stay hot, as more and more people opt for a quiet night in rather than going out or calling the delivery guy.
In London, I’m Christopher Werth for Marketplace.
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