Warren Buffet reported interested in Yahoo via consortium
14 May 2016
Billionaire investor Warren Buffett is throwing his considerable clout behind a consortium bidding for Yahoo's Internet assets that includes Dan Gilbert, Quicken Loans' founder and owner of the NBA's Cleveland Cavaliers, USA TODAY reported citing a source.
The group is one of several vying for properties of Yahoo, the struggling Internet icon led by chief executive Marissa Mayer, the source said on the condition of anonymity. Verizon is considered the front-runner in the auction process, now in its second round
Reuters first reported Buffett's entry into the bidding, citing unnamed people. Buffett, chairman of Berkshire Hathaway, had no comment when reached by phone by Reuters.
A representative for Yahoo declined to comment. Representatives for Berkshire Hathaway and Rock Ventures LLC, the Detroit-based investment and real estate firm chaired by Gilbert, did not respond to requests for comment.
"Clearly it gives whatever offer he might be participating in or contributing to a greater level of gravitas," said Scott Kessler, an analyst with S&P Global Market Intelligence, who said he had no knowledge of Berkshire's involvement beyond what Reuters reported.
Yahoo's fading fortunes, and growing unrest over the turnaround plan of Mayer, led to the auction after mounting pressure from activist shareholders, including hedge fund investor Starboard Value. Despite an online audience of up to 1 billion, Yahoo faces withering competition from Google, Facebook and others for digital advertising.
The involvement of Buffett, called the Oracle of Omaha for his lengthy tenure as an investor with enviable returns, was considered unusual. His philosophy has leaned toward investing in companies with strong competitive strengths, or economic "moats," though he also takes a very long term view of his assets.
Josh Brown, chief executive of Ritholtz Wealth Management, tweeted that it was "rare to see Buffett pursue a company with management he can't leave in place."
"As a finance partner, I could see it. can't believe it as equity owner," tweeted Brown.
One of Buffett's most well-known tech investments - IBM - has fared poorly in the past year, one of a so-called "dirty dozen" Berkshire stocks that had lost a combined $13 billion in the 12 months ended in February.
Buffett has, however, has shown an ability to identify value and help companies perform in creative ways, and has tended toward investments in well-known consumer brands including Coca-Cola, Wells Fargo & Co. and American Express.
A key player from Yahoo's past has a strong connection to Buffett. Former Yahoo president Sue Decker sits on the Berkshire Hathaway board.