By Michael Corkery
January 20, 2010, 12:09 PM ET
CNBC VIDEO: Becky Quick One-On-One with Warren Buffett -21/01/10
No.
But he can use his bully pulpit to talk up the value of Kraft shares.
This morning Buffett told CNBC that he had “doubts” about the Kraft-Cadbury tie-up and said he feels “poorer” because of it. Buffett did not go into much detail but the move has Buffett watchers scratching their heads to figure out what the Oracle of Omaha is up to.
In reality, Buffett cannot derail the deal because Kraft’s offer does not require a shareholder vote. (Cadbury shares are down just 1%)
So what is Buffett really trying to say?
Perhaps he’s just doing some guerilla marketing, talking up the value of Kraft shares. He mentioned on the CNBC appearance that Kraft shares were “undervalued.” Oddly, he did so while praising Kraft CEO Irene Rosenfeld, even making the bizarre observation that he would make her a “trustee” of his will.
How much did he hate transaction? Not as much as the rhetoric may suggest. He said he would not sell his shares in Kraft partly because –yes — they were “undervalued.”
Buffett ’s Kraft advertising campaign began a few weeks ago when he protested Kraft’s plan to issue new shares to pay for the deal. “What we know with certainty, however, is that Kraft stock, at its current price of $27, is a very expensive “currency” to be used in an acquisition,’’ according to Berkshire Hathaway’s statement.
Of course, Buffett’s comments did not have their desired effect today. The stock happens to be down nearly 3%. But he keeps signaling that the company is a great value. Is this disciplined shareholder stewardship or high-class marketing pitch?
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