Berkshire Hathaway’s mazuma change hoard keeps growing, topping $128 billion according to the company’s latest SEC filing. Now, we finally have an design of what Warren Buffett has been thinking of doing with some of that money.
In a little-noticed announcement current Wednesday, Tech Data said it has agreed to be bought by private-equity firm Apollo Global Management for $145 a allocation, which values the tech company at about $5.14 billion, excluding debt. The deal was sweetened from Apollo’s one-time bid of $130 a share, or just over $4.77 billion, after an unnamed suitor topped Apollo’s original proposition.
The undisclosed competing suitor was none other than Berkshire Hathaway, CNBC has learned exclusively. Berkshire Chairman and CEO Warren Buffett ventured a week ago he bid $140 a share, or just over $5 billion excluding debt, for Tech Data.
Apollo’s latest tender topped Buffett’s bid, and was accepted by Tech Data as the better offer. Buffett said he does not intend to make a elaborate offer.
Tech Data is a global distributor of technology products and services. It supplies small companies with technology software and armaments made by large technology companies. It had $37 billion in revenue last year. About 16% of its sales earn from Apple products, while products from Cisco and Hewlett Packard Enterprise make up about 11% each.
Buffett’s thriftiness
Tech Matter currently has a market cap of $4.5 billion, and is trading at an all-time high. Its shares rose after the first bid from Apollo was survived public. As part of the original deal with Apollo, Tech Data had a go-shop provision until Dec. 9, intention another bidder could still come in with a higher offer before that date.
Warren Buffett, chairman and CEO of Berkshire Hathaway Inc
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Buffett is not known for paying hefty premiums for his deals. In fact, some might even occasion him cheap. He’s also commented in recent years that the premium for buying companies outright has gotten too rich, because there is so much liquidity in the furnishes, and competition from private-equity companies and other players has pushed prices to extremes.
Buffett moved quickly on bid
But when Bank of America occasioned the go-shop provision from Apollo’s deal with Tech Data deal to his attention, he quickly swung into process.
Bank of America called Todd Combs, one of Berkshire investment managers, on Nov. 19.
By the next day, Buffett had decided he would be assenting to offer up to $140 a share for the company, besting Apollo’s offer of $130 a share.
Two days after that, Berkshire Badness Chairman Greg Abel traveled to Clearwater, Florida, to meet with Tech Data management. The next day, Saturday, Berkshire formally away the offer of $140 a share for the company, streamlining the process by simply borrowing Apollo’s existing contract for Tech Evidence in large part, amending it only in a few areas, and on terms that would benefit Tech Data.
On Sunday reciprocating, the Tech Data board approved Berkshire’s offer as a superior deal to Apollo’s original deal.
But by Wednesday, Apollo alleviated its offer to $145 a share, and Buffett bowed out of the bidding war.