Warren Buffett just crushed Bill Ackman’s dream deal

Business Insider August 10, 2015 0

Bloomberg via Getty Images Pershing Square’s Bill Ackman. Warren Buffett — billionaire investor, philanthropist, Bill Ackman dream-crusher. Last week The Wall Street Journal reported that Ackman’s hedge fund, Pershing Square, had taken a $5.5 billion stake in Mondelez , the snack company behind Oreos and Ritz crackers with a $74.8 billion market cap.

bill ackmanBloomberg via Getty ImagesPershing Square’s Bill Ackman.

Warren Buffett — billionaire investor, philanthropist, Bill Ackman dream-crusher.

Last week The Wall Street Journal reported that Ackman’s hedge fund, Pershing Square, had taken a $5.5 billion stake in Mondelez, the snack company behind Oreos and Ritz crackers with a $74.8 billion market cap.

According to the report, Pershing would most likely try to sell Mondelez to an even bigger food company — such as the Buffett-owned Kraft Heinz — or slash costs in a big way.

Of course, for that to happen Kraft Heinz would have to agree to buy Mondelez, which Kraft spun out in 2012.

Unfortunately for Ackman, however, it looks as if Buffett is not into the idea. Buffett said in an interview with CNBC on Monday morning that he thought Kraft Heinz was unlikely to buy something as expensive as Mondelez.

“At Kraft Heinz, we have our work cut out for us for a couple of years,” Buffett said. “Frankly, most of the food companies sell at prices that it would be very hard for us to make a deal even if we had done all the work needed at Kraft Heinz.”

Bummer.

Another activist hedge fund has a big stake in Mondelez as well: Nelson Peltz’s Trian Partners. That fund was agitating for Mondelez to sell itself to Pepsi for over a year. Pepsi, however, wouldn’t bite.

Who knows whether they will find a buyer for this thing.

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