Warren Buffett's "Other" Takeover Bid Lost In the Sokol Noise (BRK.a) (BRK.b) (CEG)
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With all the hoopla surrounding the resignation of David Sokol from Warren Buffett's Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B), the market appears to have completely skipped over the fact that its MidAmerican unit had a substantial takeover bid on the table for another yet undisclosed company before deciding on Lubrizol (NYSE: LZ).
Here is one passage from the letter the Oracle released yesterday on Sokol:
As late as January 24, I sent Dave a short note indicating my skepticism about making an offer for Lubrizol and my preference for another substantial acquisition for which MidAmerican had made a bid. Only after Dave reported on the January 25 dinner conversation with James Hambrick did I get interested in the acquisition of Lubrizol.
So the question is what was the other company? Is it still in play?
In a recent interview Buffett indicated his elephant gun was not exactly put away after the Lubrizol deal, suggesting there could be another multi-billion dollar deal on the horizon.
So while the mainstream financial press opines on the Sokol news, smart investors are turning over rocks and connecting dots.
One notion that could put a wrench in this potential deal is the fact Sokol was the Chairman of MidAmerican. However, it would seem unlikely Buffett would balk at at a quality takeover opportunity just because the opinion of one man may not be in the equation. Buffett, Charlie Munger and the other Board members are the go to here.
So when the question surfaces “who could MidAmerican bid for?” one company sticks out like a sore thumb - Constellation Energy Group, Inc. (NYSE: CEG).
In 2008, MidAmerican entered a deal to acquire Constellation Energy which was later terminated. Are they back now?
If anyone has an idea of another company MidAmerican could buy be please comment below.
Here is one passage from the letter the Oracle released yesterday on Sokol:
As late as January 24, I sent Dave a short note indicating my skepticism about making an offer for Lubrizol and my preference for another substantial acquisition for which MidAmerican had made a bid. Only after Dave reported on the January 25 dinner conversation with James Hambrick did I get interested in the acquisition of Lubrizol.
So the question is what was the other company? Is it still in play?
In a recent interview Buffett indicated his elephant gun was not exactly put away after the Lubrizol deal, suggesting there could be another multi-billion dollar deal on the horizon.
So while the mainstream financial press opines on the Sokol news, smart investors are turning over rocks and connecting dots.
One notion that could put a wrench in this potential deal is the fact Sokol was the Chairman of MidAmerican. However, it would seem unlikely Buffett would balk at at a quality takeover opportunity just because the opinion of one man may not be in the equation. Buffett, Charlie Munger and the other Board members are the go to here.
So when the question surfaces “who could MidAmerican bid for?” one company sticks out like a sore thumb - Constellation Energy Group, Inc. (NYSE: CEG).
In 2008, MidAmerican entered a deal to acquire Constellation Energy which was later terminated. Are they back now?
If anyone has an idea of another company MidAmerican could buy be please comment below.
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