Major investor gives thumbs down to Kraft's Cadbury buy

While Mr Buffett indicated he would not sell his stake in Kraft, shares of the company fell more than two percent as the United States food group came under pressure from its largest shareholder.

Mr Buffett told cable business channel CNBC yesterday: "Irene has done a good job in operations. I like Irene. I mean, I find her – she's been straightforward with me, we just disagree.

"She thinks this is a good deal, I think it's a bad deal. I think she's a perfectly decent person. She could be a trustee under my will. I just don't want her making this particular deal."

Mr Buffett's Berkshire Hathaway holds a 9.4 per cent stake in Kraft, the world's second-largest food group.

On Tuesday, Kraft sealed a deal with Cadbury's board to buy the confectionery company for cash and shares after a four-month hostile takeover battle.

The final deal included more cash and fewer new Kraft shares than Kraft had previously offered. It changed the deal to offer fewer shares after Berkshire said it would vote against an initial plan to issue up to 370 million shares.

In lowering the number of shares issued, Kraft no longer needed its shareholders to approve the deal.

"If I had a chance to vote on this, I'd vote no," Mr Buffett said. "I think Kraft is still undervalued. I just don't think it is as undervalued as it was three weeks ago." Mr Buffett also questioned the wisdom of Kraft selling its fast-growing pizza business to Nestle to in order to raise cash for the Cadbury deal. "I feel poorer," he said.

In the United States, Kraft shares fell 2.2 per cent to $28.75 after Mr Buffett's comments.

A Kraft spokeswoman defended the Cadbury deal. Perry Yeatman said: "We respect his opinion. He's one of our largest investors.

"We think this is a good deal for us. It transforms our portfolio for better long-term growth."

Cadbury employs around 45,000 in 60 countries. It has 5,600 staff at eight manufacturing sites in the UK and Ireland, including 800 at its Bassett's Liquorice Allsorts plant in Sheffield.