We’re told that Warren Buffett doesn’t play chicken, that once the Oracle of Omaha has sized up an acquisition and put a price on it, he doesn’t move from it. That he doesn’t get into the kind of petty quarrels that make life on Wall Street so much more fun and interesting and potentially destructive than life in Nebraska. That he is a man of peace who cannot and will not be provoked into battle.
But Warren Buffett has never met a provocateur the likes of Elliott Management founder Paul Singer. Singer’s pretty confident he can get a rise out of Buffett one way or another—this is, after all, his greatforte—and has already hired bankers and lawyers for the fight. But Buffett has more or less refused to take such bait since 1964, when he took over Berkshire Hathaway out of spite and over 12.5 cents a share. Can he make Buffett so mad that he hangs a picture of Singer in his office to attack with a slingshot, and then perhaps boost his offer for Oncor a bit?
Buffett has walked away from bids that have faced resistance. This year, Berkshire and 3G Capital agreed to each put up $15 billion to back Kraft Heinz Co.’s offer for Unilever NV, only on the premise that it was a “friendly” deal, Buffett said in May during his annual meeting. When Unilever claimed the bid undervalued the company, the billionaire and his partners stopped the pursuit….
“There are lots of examples of Warren Buffett doing things differently from the way he describes himself,” Meyer Shields, a Keefe, Bruyette & Woods analyst, said. "He does what he can to make money for himself and for his shareholders….”
Some doubt whether Singer truly has the desire to bid for Oncor and run the utility since hedge funds don’t typically want to own companies.
“I suspect Buffett knows this as well," said Eileen Appelbaum, a senior economist for the Center for Economic & Policy Research in Washington. “Buffett can call Singer’s bluff. Or he can decide that Singer’s demand is an inconsequential annoyance and agree to raise his offer."
Paul Singer Could Finally Get Warren Buffett to Punch Back [Bloomberg]
One Game Warren Buffett Doesn’t Play: Chicken [WSJ]
Elliott Management hires Moelis for $9.3 billion Oncor bid [CNBC]
Warren Buffett, Paul Singer take acquisition battle to court [N.Y. Post]