Already owns all of the chocolate he needs.
If you feared the Oracle of Omaha was slowing down, fear not, for Warren Buffett has proven he’s up for throwing together the biggest deal of his career in a few weeks.
Mr. Buffett didn’t think of a deal until about five weeks ago, when Precision’s CEO Mark Donegan stopped by the Berkshire office as part of a routine visit to shareholders. Mr. Buffett said he dropped by Mr. Combs’ office for the last 15 minutes of the visit, and was “impressed” with Mr. Donegan.
Soon after, he proposed to Mr. Combs that they buy the entire company….
Buffett proves he’s still got it, Todd Combs proves that Buffett’s faith in the plucky young hedge fund manager wasn’t misplaced, and Mark Donegan gets a 21% premium for his shareholders and also probably to keep his job. Everyone’s a winner. Well, maybe not everyone, as Bill Ackman will have to wait until after Warren cashes his 85th and (probably) 86th birthday checks before he even thinks about buying Bill’s latest big idea. And probably not even then.
“This takes us out of the market for an elephant,” he said. “This means we have to reload over the next 12 months or so.” Mr. Buffett said a deal with Mondelez, or any big food company, is unlikely in the near term. And he suggested that the pricetag that would be required to buy the company was prohibitive.
“At Kraft Heinz, we have our work cut out for us for a couple of years,” he 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.”
Buffett’s Berkshire to Buy Precision Castparts for $32 Billion [WSJ]
Warren Buffett’s Precision Castparts Matchmaker: Todd Combs [WSJ MoneyBeat blog]
Warren Buffett Throws Cold Water on Mondelez Deal Talk [WSJ MoneyBeat blog]