Heh, when there’s a credit crunch it’s great to be a guy who’s been hoarding cash for the past few years.
I guess that prudence pay off if you wait long enough. It’s pretty hard to put one over on a guy who stared stock trading in the wake of the ’29 crash.
Warren Buffett took advantage of the credit crunch yesterday as Mars announced an agreed $23 billion (£11.5 billion) takeover of Wrigley in a deal that the world’s richest man helped to finance in return for a cut-price stake in the chewing gum group.
Mr Buffett’s Berkshire Hathaway investment vehicle, which has $40 billion of cash to spend at a time when deal financing has largely dried up, has contributed $4.4 billion of the funds Mars needed to purchase the world’s biggest chewing gum company.
In return, Mr Buffett, who is already profiting from bond insurers’ woes after setting up a rival securities underwriter to take new business away from the cash-strapped traditional players, will acquire a 19 per cent stake in Wrigley for a discounted $2.1 billion.
Bill Wrigley Jr, the chairman and chief executive of Wrigley and the founder’s great grandson, said that he had invited Mr Buffett into the deal for his “wisdom, experience and endorsement”, but conceded that the billionaire was also there because of his deep pockets.