By Rick Rothacker
March 4 Berkshire Hathaway Inc is on
the hunt for more deals similar to its planned purchase of H.J.
Heinz Co, Warren Buffett, the conglomerate's chief
executive, said on Monday.
"If we get a chance to buy another Heinz, we will do that,"
Buffett said on CNBC-TV.
Berkshire likes the ketchup maker's business, the deal's $23
billion price, and its partner in the transaction, private
equity firm 3G Capital, Buffett said in an extended interview.
"We hope to own Heinz 100 years from now," Buffett said. "If
you own great brands and you take care of them, they're terrific
Buffett said he is not currently eyeing another consumer-
products company, but is looking at a possible deal in a sector
he would not disclose. After a recent binge of buying
newspapers, he said he is not interested in buying the Chicago
Tribune or the Los Angeles Times from the Tribune Co.
However, he has been buying papers in smaller communities
and said Friday he planned to continue doing so.
After the Heinz purchase was announced, the U.S. Securities
and Exchange Commission filed a lawsuit against unnamed traders
the agency said used a Goldman Sachs account in
Switzerland to trade on purported inside knowledge of the
transaction. Buffett said Berkshire likes to move quickly on
deals to avoid information leaks, and said he could "guarantee"
the person who made questionable options trades ahead of the
deal was acting on inside information.
"They will nail that guy, and they should," he said.
Monday's interview followed the release Friday of Buffett's
annual letter to Berkshire shareholders. In the closely followed
missive, the billionaire investor said Berkshire may end a long
streak of outperforming the S&P 500 this year. For the first
time, the growth in Berkshire's book value per share may
underperform the growth in the stock index when measured over a
five-year period. [ID: nL1N0BTGV2]
In the interview, Buffett said Berkshire is buying stocks
because they are cheaper than other types of investments. "We
are buying them not because we expect them to go up," he said.
"We're buying them because we think we're getting good value for
Buffett remained optimistic about the U.S. economy despite
gridlock in Washington over fiscal issues and a tepid economic
recovery. "It hasn't taken off," he said of the recovery, "but
it hasn't stopped."
MORE MONEY FOR TODD AND TED
In the CNBC interview, Buffett said he will be giving
Berkshire money managers Todd Combs and Ted Weschler more money
to invest after a successful year. As of March 31, they will
both manage about $6 billion each, up from $5 billion apiece,
"Todd and Ted are young and will be around to manage
Berkshire's massive portfolio long after (Berkshire Vice
Chairman) Charlie (Munger) and I have left the scene," Buffett
wrote in Friday's letter. "You can rest easy when they take
One of the stocks that Berkshire has an interest in is Bank
of America Corp. In August 2011, Buffett purchased $5
billion in preferred shares as the U.S. bank was struggling amid
concerns about its capital levels. The deal also included
warrants that allow Berkshire to buy 700 million shares of the
bank's common stock at a price of $7.14 over 10 years. The
shares are currently trading above $11.
"They are doing the right things," he said of Bank of
America. "..over time, they will do well."
Buffett also cleared up the mystery around the "credentialed
bear" investor who will get a chance to ask questions at
Berkshire's annual shareholder meeting this spring: Hedge fund
manager, Doug Kass. Kass took to Twitter to say "I am going to
Disneyland, I mean Omaha!" to take part in the meeting in May.