The surprise resignation of leading Warren Buffet successor, David Sokol, raised many unanswered questions on Thursday over shares he bought of Lubrizol before Berkshire Hathaway announced its $9 billion acquisition of the company on March 14. But ultimately, it's more of a question of appearance rather than legal liability, according to the vice chairman of Morgan Stanley.
"The fact that someone who is out there looking for acquisitions for the company is also permitted to make investments in what could be targets—that's not something that actually looks good," Robert Kindler, vice chairman and global head of M&A at Morgan Stanley, told CNBC Thursday.
"My assumption: In the future, Warren Buffet's not going to allow anyone who works for him to be out investing in individual stocks, when there's companies he may be interested in," he said.
In terms of mergers and acquisitions, many boutiques are using the decision handed down last month by the Delaware Chancery Court over the Del Monte leveraged buyout as reason why they should be hired versus the larger firms. But Kinder takes issue with this notion.
"They [boutiques] serve a function, but what's ironic about it or interesting about it is they can't provide the most important advice that boards need—capital markets advice," Kinder said.
"So, if you're a company that is getting a takeover proposal from a leveraged-buyout firm, you need to know that they are leveraging it up right. You need to have someone who understands the market," he went on to say.
"It's going to be a good year for M&A," Kindler said.
"We've seen, really, this cross border activity at a very large scale because we have the New York Stock Exchange [merger] deal with Deutsche Boerse, we have the deal with T-Mobile and AT&T ... we're going to have a lot more cross-border."
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