The New York Times' DealBook discusses the recent surge in call option activity in shares of Kraft Foods (NYSE: KFT). Rumors are swirling that Warren Buffett's Berkshire Hathaway (NYSE: BRK.A) is looking at the company as a potential investment and may be accumulating the stock.
At the most recent Berkshire annual meeting, Buffett spoke of the company's desire to find a deal somewhere north of $40 billion and, with a market cap of $55 billion, Kraft could fit the bill.
Of course, the most likely scenario is that Berkshire is simply accumulating a stake in the company -- Berkshire's portfolio includes investments in dozens of companies including Wells Fargo (NYSE: WFC), Nike (NYSE: NKE), and Home Depot (NYSE: HD).
But given that Berkshire is actively seeking a large acquisition, could Kraft fit the fill? It seems like a typical Buffett investment: simple, easy to understand business, extremely strong brands, and a reasonable valuation.
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Reader Comments (Page 1 of 1)
6-04-2007 @ 7:00PM
gumbo said...
Warren Buffet is not a shareholder. He is a private equity invesotr. There is many good companies with oodles of cash flows and not paying out to shareholders. Managements sometimes dislike shareholders and prefer to go private or to Warren Buffet with high walls and a moat around . Warren see good cash flows and can have access to them while shareholders cant. Is Warren Buffet a shareholder? Not!!