OMAHA, Neb. (
) -- Warren Buffett gets so much press for being the world's greatest investor, in some ways it was nice to see him taken down a notch or two when some of his derivatives investments tanked in the market meltdown, and some questions were raised as to his chink-less armor.
( BKR.B) quickly recovered their footing, though, buying up
( BNI) and seeing his investment in
, which was at first criticized, reach a level where Berkshire Hathaway's smarts can't be doubted.
Still, could it be that the ongoing candyland saga involving the bid by
( KFT) to buy
( CBY) might be the ultimate can't-lose bet for Buffett, the investment equivalent of a full-proof gain no matter which way the deal goes?
It has been bandied about in the press that long-time Buffett lawyer Byron Trott has been busy meddling in the Cadbury Affair. And why not? Berkshire owns a huge stake in Kraft, and over the course of 2009, has built up a significant stake in
. Buffet publicly warned Kraft to not overpay for Cadbury.
On Friday afternoon, the
Wall Street Journal
reported that Nestle might be getting involved in the bidding process through the buying of some chocolate brands from Hershey, a transaction that might allow Hershey to make a rival bid for Cadbury. Previously there had been rumors that Nestle might join a combined bid for Kraft.
So is it Berkshire Hathaway's recent increased holding in Nestle, possibly pitted against Berkshire's long-time huge stake in Kraft?
It's ultimately anybody's guess as to which company is going to win the Chocolate War, but as far as Berkshire Hathaway shareholders, which result would have the better portfolio ramifications?
Would a bidding war between Hershey and Kraft force Kraft, which has been prudent so far in its offer, to pull out of the deal, thereby guaranteeing that it doesn't overbid, as Buffett warned them not to do. And if Hershey were to win Cadbury, backed by a needed capital infusion from Nestle, would the Hershey brands Nestle picks up in the process be doubly good for Buffett's shareholders?
Could it be a no-lose situation for Buffett and thereby, possibly his shrewdest investment move yet? Or does Kraft need to get this deal done for Berkshire shareholder to see the biggest bang for their buck? Berkshire owns almost 10% of Kraft, or more than $3.6 billion, and less than 1% of Nestle, or a comparatively measly $166 million.
If so, what is relatively minor Berkshire holding Nestle think it's doing making problems for Kraft on the way to stealing the Cadbury egg?
What do you think about Buffett's role in the current Cadbury drama? Take the poll below, and learn the consensus of TheStreet.
--Written by Eric Rosenbaum in New York
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