CHICAGO, Sept 17 The trust that holds voting
control of candy maker Hershey Co (HSY.N) has hired Warren
Buffett's favorite banker to advise it on a possible bid for
British chocolatier Cadbury, the Wall Street Journal reported
Such a bid would counter an offer made by Kraft Foods Inc
KFT.N, of which Buffett's Berkshire Hathaway Inc (BRKa.N) is
the largest shareholder.
The Journal, citing people familiar with the matter, said
that the Trust hired former Goldman Sachs & Co banker Byron
Trott, as well as boutique banking firm Watch Hill Partners, to
advise on a possible bid for Cadbury.
Trott has often been Buffett's favorite banker, though the
story gave no indication if Buffett would be involved in a
possible bid by Hershey or the Trust for Cadbury.
Representatives of the Hershey Trust, Hershey Co and Watch
Hill declined to comment on the story, while Trott could not be
A representative for Buffett was not immediately available
Cadbury was put in play last week when Kraft, the world's
second-largest food company, disclosed it had proposed a cash
and stock offer for the company. The bid was valued at about
$16 billion based on Kraft's closing price of $26.27 on
Wednesday on the New York Stock Exchange.
Cadbury has rebuffed the bid as too low.
On Wednesday, Buffett told CNBC that Kraft had "a lot to
do" to justify the price offered for Cadbury.
Buffett also said investors undervalued Kraft's stock, so
it was using a weak currency to pay full value for Cadbury.
But analysts have been skeptical that an offer would come
from Hershey because any bid using its stock would run the risk
of diluting the trust's stake to the point that it would lose
control over the company.
The trust maintains that Pennsylvania law requires it to
maintain control of Hershey.
Still, Buffett has shown an interest in confections in the
past, with Berkshire last year funding $6.5 billion toward Mars
Inc's purchase of Wm. Wrigley Jr Co. Berkshire also owns See's
Candies, whose confections Buffett munches at the annual
shareholder meetings of Omaha, Nebraska-based Berkshire.
(Reporting by Brad Dorfman in Chicago, Dan Wilchins in New
York and Paritosh Bansal in New York, editing by Matthew