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Mondelez’s future sparks speculation

Billionaire investor Warren Buffett tossed cold water on the idea that snack food giant Mondelez could soon be united with Kraft Foods.

In an interview on CNBC on Monday, the 84-year-old head of Berkshire Hathaway said there’s still too much work to be done on the newly formed Kraft Heinz to consider a large acquistion like Mondelez, which is valued at $75 billion.

“At Kraft Heinz, we have our work cut out for us for the next couple of years,” said Buffett, who teamed up with Brazilian private equity firm 3G Capital to merge Kraft with Heinz earlier this year.

Buffett’s rebuff didn’t seem to bother fellow billionaire Bill Ackman, who announced a $5.5 bil- lion investment in Mondelez last week — stirring speculation that the maker of Oreo cookies could be a buyout target for Kraft.

In a conference call with investors — also on Monday — Ackman confirmed that he sees “possibilities for transactions” to boost Mondelez’s stock price. But he also touted Mondelez’s virtues as a standalone company, saying the stock is “attractively priced” given the opportunities to improve margins, or revenue minus the cost of the product.

Mondelez CEO Irene Rosenfeld has been under pressure to improve margins thanks to Nelson Peltz, another activist hedge fund manager.

Ackman on Monday suggested Rosenfeld could reach even higher. “We think there a huge opportunity for the company to improve its productivity,” the hedge fund manager said.