Warren Buffett was close to becoming an integral part of the technology channel with the business magnate tabling an offer to buy Tech Data before being outbid by Apollo Global Management.
As chairman and CEO of Berkshire Hathaway, Buffett entered proceedings at $140 a share, valuing the value-added distributor at just over $5 billion.
The proposal eclipsed that of Tiger Midco, an affiliate of funds managed by affiliates of Apollo Global Management, which initially opened the bidding at $130 a share, valuing the business at just over $4.77 billion.
Interest from Buffett was first spiked by Bank of America, who according to CNBC, “brought the go-shop provision from Apollo’s deal with Tech Data deal to his attention”.
Buffett’s intervention however sparked a revised offer, with Tech Data striking an amended acquisition deal worth $6 billion with Tiger Midco last week. According to CNBC, Buffett does not intend to make a higher offer.
“Buffett is not known for paying hefty premiums for his deals,” a CNBC report stated. “In fact, some might even call him cheap.
"He’s also commented in recent years that the premium for buying companies outright has gotten too rich, because there is so much liquidity in the markets, and competition from private-equity companies and other players has pushed prices to extremes.”
As reported by ARN, with the revised deal on the table, the Tech Data board ultimately determined that the competing offer no longer constituted a superior proposal. As a result of the buyout, Tech Data will become a privately held company.