The Financial Times reports that Hershey is getting closer to finalizing the terms of a counter-bid to Kraft’s hostile £10.4 billion bid for Cadbury.  The war of words between Kraft and Cadbury has escalated in recent days as Cadbury’s management ratchets up the rhetoric regarding Kraft’s “conglomerate” model being an unattractive fit for Cadbury.  Warren Buffett’s recent comments regarding Kraft seeking a “blank check” for the purchase only dimmed prospects for the acquisition even further.

The problem for Hershey has been the possibility that an acquisition of Cadbury would require taking on significant debt and could impact the company’s investment grade credit rating.  In order to reduce the amount of debt required, Hershey has authorized Byron Trott to seek private equity investors to participate in the deal.

Mr. Trott is a former Goldman Sachs banker who now runs his own firm.  He is also known as Warren Buffett’s favorite banker.  Berkshire Hathaway reportedly made an investment in Mr. Trott’s new firm when he set it up last year.

It seems highly unlikely that Berkshire Hathaway would participate in the planned equity raise for a Cadbury bid given the company’s investment in Kraft and Mr. Buffett’s high profile comments regarding the transaction.  Nevertheless, for those who enjoy following corporate board room dramas, it looks like we are in for at least a few more chapters before the story on Cadbury’s future is complete.

The author owns shares of Berkshire Hathaway.