Pershing Acquires 2% Of Kraft

Pershing Square Capital Management has taken a stake in Kraft Foods Inc. (NYSE: KFT) of about 2%.

The purchase by the activist hedge fund firm run by Bill Ackman comes at a good time for Kraft, as it attempts a hostile takeover bid for the British candy maker Cadbury Plc. (NYSE: CBY). A person close to the situation says that Pershing approves of Kraft's takeover bid.

The show of support comes at a good time for Kraft. Cadbury is vehemently opposed to a takeover by Kraft. In order to win over Cadbury shareholders, Kraft may have to increase its bid.

Analysts and Kraft's biggest shareholder, billionaire investor Warren Buffet, are worried that raising the bid will result in the company overpaying and will reduce any possible long term gains.

Meanwhile, The Hershey Company (NYSE: HSY) may be waiting in the wings, preparing a bid of its own for Cadbury.

For its part, Hershey has declined to comment on the takeover talk.

"As a matter of policy, we do not comment on merger and acquisition issues," Hershey spokesman Kirk Saville said in an email.