Think for Yourself, Buffett Style

We've written twice about the pending hostile takeover of Cadbury by Kraft. As an illustration of the Agency Dilemma or principal-agent problem and a quick followup. The story continues to remain interesting (at least to me- hey, I find this stuff dramatic, ok? Some like football, I like hostile takeovers. Call me a finance nerd!) Anyway, Kraft's largest shareholder is none other than Warren Buffett's Berkshire Hathaway. Berkshire owns some 9.4% of the company, a significant voting block. Kraft just sent out proxies for a "special shareholder meeting". "Special" shareholder meetings are not, as one might assume, some grand event to celebrate the company's success complete with band, sushi buffet, dancing and balloons.

Rather, "special" shareholder meetings are those shareholder meetings called outside of the normal annual meeting. Thus, they are "special" in the respect they aren't your regularly scheduled program. Disappointing, I know. Moving on, Kraft sent out the proxies to

"vote on a proposal to approve issuing up to 370 million shares of Kraft Foods Inc. Class A common stock in connection with our proposed acquisition of Cadbury plc, including any issuance of shares of Kraft Foods Inc. Class A common stock to finance the proposed aquisition."

That seem ok, right?