Just 1.5 per cent of Cadbury shareholders have accepted Kraft's hostile £10.9bn takeover bid, the US food giant admitted yesterday.
The low take-up is little surprise at this stage, a month before the offer expires and two weeks before Kraft's shareholders sign off the final details of the deal. Kraft has already sweetened the cash element of the deal once, and the UK confectioner's shareholders are likely holding out for a higher offer.
But Kraft may struggle, given that its biggest investor – the legendary Warren Buffett – warned earlier this week that upping the offer threatens to destroy value for existing Kraft shareholders, and that he will not vote "yes" to a "blank cheque" for the company to raise its bid for Cadbury any higher.
Mr Buffett's Berkshire Hathaway investment vehicle owns 9.4 per cent of Kraft. The company has until 19 January to persuade its shareholders to sign off its bid proposal, which includes plans to issue 370 million new Kraft shares to fund the deal.
Kraft added an extra 60p in cash to its offer on Tuesday, using the proceeds from its $3.7bn (£2.3bn) sale of its US pizza business to Nestlé. But the total value of the cash-and-share deal remains the same, and Cadbury once again rejected the offer, repeating the claim that it is "derisory" and fundamentally undervalues the business.
Nevertheless, Kraft still believes it can secure Cadbury. With other bidders now seen as less likely to enter the fray, Cadbury shares slipped back yesterday, closing the day barely above the 765p or so that Kraft's offer values the company's stock. Until recent days, the shares had been trading at a significant premium to the offer.