Bank in trouble didn't want SWF, asked Buffet. Was rebufed.
Buffett turns down bank in need
Graeme Wearden Guardian Unlimited, Thursday December 27 2007 US investor Warren Buffett has rebuffed approaches from at least one bank looking for financial assistance to help it through the credit crunch.
Buffett, dubbed the "Sage of Omaha" after decades of successful stock picking, revealed yesterday that he had turned down an approach from a major financial institution that had hoped to persuade him to invest in them.
"So far we have not seen a deal that causes me to start salivating," said Buffett in an interview with CNBC.
He was speaking after his investment vehicle Berkshire Hathaway spent $4.5bn (£2.26bn) on a majority stake in Marmon, a US industrial conglomerate, in one of its biggest ever acquisitions.
Several investment banks have sold stakes to outside investors after getting caught in the fallout from the US sub-prime crisis. Abu Dhabi's sovereign wealth fund is pumping $7.5bn into Citigroup, and Merrill Lynch has agreed a cash infusion of as much as $6.2bn from Singapore's Temasek fund.
Buffett had been rumoured to be planning a similar move into the financial sector. The Marmon deal led some analysts to suggest that the banking industry may not yet have hit the bottom, even though share prices have fallen sharply in recent months.
Marmon consists of 125 different businesses, in sectors including transportation equipment, construction and electrical components. Their products include railroad cars, wire and cable, and water treatment kits.
Buffett described the deal as "a very large bet on America over a long period of time". Berkshire Hathaway has taken a 60% stake in the firm, and will buy the rest over the next seven years. |
