Warren Buffett reportedly passed on buying Tiffany despite Berkshire's mountain of cash

Key Points
  • Tiffany approached Berkshire Hathaway's Warren Buffett when looking for a buyer, but the Oracle of Omaha reportedly declined.
  • Buffett in 2009 bought $250 million worth of the company's bonds.
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Warren Buffett's Berkshire Hathaway passed on the opportunity to acquire Tiffany, according to the Financial Times.

The luxury jeweler approached Buffett after receiving a takeover bid from LVMH, but the Oracle of Omaha — who in 2009 bought $250 million worth of the company's bonds — declined, according to people with knowledge of the matter. Buffett confirmed to the Financial Times that the conversation took place.

In November, Tiffany's board ultimately agreed to a $16.2 billion takeover from LVMH, whose brands include Moet & Chandon, Dom Perignon, Givenchy and Louis Vuitton.

Berkshire Hathaway's last full-company takeover was Precision Castparts in 2015. Without a significant increase in its buyback program, Berkshire Hathaway is now sitting on a record $128.2 billion in cash, third quarter filings showed.

But that's not to say Buffett isn't completely sitting on his hands.

In November, Berkshire bid $140 per share for Tech Data, although the offer was ultimately topped by Apollo Global Management, which sweetened its bid to $145 a share after Buffett outbid the private equity giant's initial sum.

Also last year, Berkshire announced a $10 billion investment in Occidental Petroleum for the Anadarko takeover, and the company maintains large positions in Apple, Bank of America, Coca-Cola, Wells Fargo, American Express and Kraft Heinz.

"In recent years, the sensible course for us to follow has been clear: Many stocks have offered far more for our money than we could obtain by purchasing businesses in their entirety," Buffett wrote in his 2018 annual report. "The companies in which we invested offered excellent value, far exceeding that available in takeover transactions."

Shares of Berkshire Hathaway gained 11% in 2019, compared with the S&P 500's 29% return, leaving some investors to question why Buffett isn't putting more money to work.

— Read the full Financial Times report here.

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