Warren Buffett’s Berkshire Hathaway is sitting on $128 billion in cash and looking to make an “elephant-sized acquisition.” But the Oracle of Omaha is having trouble finding the right takeover target.
The latest: Buffett reportedly made a recent offer for software and hardware distributer Tech Data, only to be topped by private equity’s Apollo Global Management.
Last week, Apollo raised its offer to $145 a share from $130 a share, valuing Tech Data at $6 billion, after a mystery rival bidder came on the scene. CNBC is reporting that the suitor was Berkshire Hathaway, which had offered $140 per share.
Why Buffett is struggling: It’s a tough market right now for an investor that prizes value. As my CNN Business colleague Paul R. La Monica notes, Buffett has lamented the fact that valuations for many companies are prohibitively expensive given that the stock market is near all-time highs. And he has continuously stressed that he won’t overpay for deals.
Buffett recently put $10 billion of Berkshire’s cash to work with an investment in oil company Occidental to help it outbid Chevron and acquire competitor Anadarko Petroleum.
But it’s been a while since Buffett managed to cut a really big deal. Berkshire’s last major acquisition was the $37 billion purchase of aerospace components maker Precision Castparts in 2016.