Cadbury questions who's pulling strings at Kraft

In a series of newspaper interviews, Roger Carr said pressure exerted by Kraft’s major shareholder Warren Buffett, as well as by ratings agencies, appeared to limit the company’s ability to change its offer materially.

The Dairylea and Toblerone firm has until January 19 to decide whether to raise its bid, which values Cadbury at 769p a share or 10.5bn.

A bid of more than 800p is likely to test the resolve of Cadbury shareholders, but in doing so Kraft will need the support of Mr Buffett, whose Omaha-based Berkshire Hathaway investment vehicle owns almost 10 per cent of Kraft.

Warning Kraft not to overpay for Cadbury, Mr Buffett last week said shareholders should not be asked to write a “blank cheque” by issuing 370 million new Kraft shares to finance the bid.

Mr Carr said this was hugely embarrassing for Kraft boss Irene Rosenfeld, adding that it was clear the “real boss of Kraft lives in Omaha”.

He also told the Sunday Telegraph: “I think it demonstrates what authority Warren Buffett has over the business and the significance of his view in the way that Kraft is run.

“I think what he did was to impose some pretty heavy restraints on the management. He knows that the rating agencies are applying the same pressure on the debt model.

“The constraint of both of these pressure points would appear to limit the ability of Kraft to make a material change in their offer.”

This week Cadbury, which employs 800 staff at its Bassett’s Liquorice Allsorts plant in Sheffield, will attempt to convince investors of the merits of its independence by publishing trading figures showing strong sales for 2009.

The Dairy Milk maker’s last defence document saw it up long-term performance targets and issue higher profit margins guidance.

Shareholders have until February 2 to accept Kraft’s offer, unless a rival bid emerges.