Buffett rebuffs advances from distressed financial firms
Says so far he’s seen no deal that would make him salivate
(NEW YORK) Billionaire Warren Buffett, the chairman of Berkshire Hathaway Inc, has said that he rebuffed US financial firms that approached him recently about buying stakes in their companies.
‘People know our phone number, and we haven’t seen anything we wanted to move on. That doesn’t mean we won’t in the next six months.’
- Mr Buffett
‘We’ve seen some deals as you can imagine in this period’, when banks and securities firms have been hit by sub-prime mortgage losses, Mr Buffett, based in Omaha, Nebraska, said on Wednesday in an interview on CNBC.
‘So far, we have not seen a deal that causes me to start salivating,’ he said. He did not say which firms approached him.
Merrill Lynch & Co, Citigroup Inc, Morgan Stanley and Bear Stearns Cos moved to shore up capital in the past three months as the value of mortgage- related assets plummeted. The New York-based firms struck agreements to obtain a total of US$18.5 billion from state-owned companies in Singapore, China and Abu Dhabi.
Mr Buffett on Oct 18 denied a New York Times report that he might buy as much as 20 per cent of Bear Stearns.
Mr Buffett, 77, has invested in Wall Street before. He injected US$700 million into Salomon Inc in 1987 to help the firm head off a takeover attempt by financier Ronald Perelman.
‘People know our phone number, and we haven’t seen anything we wanted to move on,’ he said on Wednesday. ‘That doesn’t mean we won’t in the next six months.’
Mr Buffett said that because of credit market turmoil, it is ‘certainly possible the big banks are not going to hit their highs on earnings for a few years’.
Merrill Lynch, the third-largest US securities firm, said on Dec 24 that it would receive a cash infusion of as much as US$6.2 billion from Singapore investment company Temasek Holdings Pte and mutual fund manager Davis Selected Advisors LP.
Merrill, which posted a US$2.2 billion third- quarter loss on US$8.4 billion of writedowns, may be forced to take another US$8.6 billion charge next month, according to David Trone, an analyst at Fox-Pitt Kelton Cochrane Caronia Waller. Merrill is a passive, minority investor in Bloomberg LP, the parent of Bloomberg News.
Citigroup said on Nov 27 that Abu Dhabi’s sovereign wealth fund would invest US$7.5 billion, after the biggest US bank estimated at least US$9 billion of fourth-quarter writedowns. State-controlled China Investment Corp is injecting US$5 billion into Morgan Stanley after the second-biggest US securities firm wrote down US$9.4 billion of mortgage-related debt.
Bear Stearns, the fifth-largest, struck an agreement in October with China’s government- controlled Citic Securities Co for a US$1 billion cross-investment. The company announced a US$1.9 billion writedown on Dec 20. — Bloomberg
Source : Business Times - 28 Dec 2007
Singapore Property - Buy , Sell , Rent , Invest
Mindy Yong
(+65)91002985
mindy@mindyyong.com
http://www.hotvictory.com
Bargain hunting starts in tepid property market »« Unexpected fall in new US jobless claims - WASHINGTON
