Cadbury deal hopes hit by Buffett

The world's richest man has thrown a spanner in the works of Kraft's plans to take over Birmingham chocolate company Cadbury.

Warren Buffett, the biggest single investor in the US food group, has refused to back plans to issue new Kraft shares, which would be used in its £10.3 billion cash and stock bid for the Dairy Milk maker.

Mr Buffett said his Berkshire Hathaway company had voted against Kraft's share issue.

The fund, which controls around 9.4 per cent of Kraft, said the proposal would give the US group's bosses a blank cheque to change its offer for Cadbury "in any way it wishes".

Kraft has until January 19 to announce its final offer and Berkshire Hathaway added that it may change its vote if it decides the bid does not destroy value for Kraft shareholders.

Kraft, the maker of Terry's Chocolate Orange, has already announced it will be boosting the amount of cash in its offer to tempt more Cadbury shareholders. It has now extended the deadline for shareholders to accept its offer to February 2.

Cadbury shares fell more than three per cent after Mr Buffett's statement and Nestle's confirmation that it is not interested in bidding for the UK firm.