For decades, Mr. Buffett has included in his company’s annual report a list of criteria for companies that might want to sell businesses to Berkshire. Berkshire is looking for large companies with little debt, the list says—and it isn’t interested in bidding wars or hostile takeovers.
“We don’t participate in auctions,” Mr. Buffett wrote in the latest annual report. “A line from a country song expresses our feeling about new ventures, turnarounds, or auction-like sales: ‘When the phone don’t ring, you’ll know it’s me.’” ...
Mr. Buffett has long been known for quickly negotiating deals and sticking with his initial price offer. ...
Mr. Buffett did raise the offer price in 1999 when he bought a majority stake in MidAmerican Energy Holdings Co., now called Berkshire Hathaway Energy. But he made the switch before the deal was announced, as he explained in his 2007 letter to shareholders.
Mr. Buffett originally offered $35 a share for MidAmerican, but after pressure from investment bankers, he raised it to $35.05, he said in the letter. “With that, I explained, they could tell their client they had wrung the last nickel out of me,” he wrote. “At the time, it hurt.”
But given MidAmerican’s growth since then, he said in the same letter, “I’m glad I wilted and offered the extra nickel.”
--Nicole Friedman, WSJ, on avoiding the winner's curse