April 30, 2008, 7:50 am, NYT
Ever since Warren E. Buffett said at Berkshire Hathaway’s annual meeting last May that he would consider a deal as large as $60 billion, Wall Street has been speculating on just what kind of acquisition the famed investor may have in mind.
The chatter heated up again this week after shareholders of American Express, the largest credit-card lender in the United States, approved a provision that makes a sale of the company easier. According to Bloomberg News, some shareholders see Mr. Buffett as a possible buyer.
The amendment, approved by a firm majority of American Express shareholders at Monday’s annual meeting, reduces the vote required to approve a sale to more than 50 percent from two-thirds.
“American Express may be considering eventually to become a private enterprise and become delisted, or become part of Warren Buffett’s empire,” Philip Berman of Berman Asset Management said during the meeting, according to Bloomberg. For its part, American Express said it had “no current plans to effect any of these actions.'’
Mr. Buffett is already a major presence at American Express: He is its biggest shareholder, with a 13 percent stake, and meets regularly with Kenneth Chenault, American Express’ chief executive. TheDeal.com’s Dealscape blog also noted that Mr. Buffett has publicly expressed interest in a credit-card company on numerous occasions.
With a market valuation of $56 billion, American Express would fit the $60 billion bill, so to speak.
As the financial markets have churned in recent months, Mr. Buffett has been striking deals. He has increased his stakes in two major banks, U.S. Bancorp and Wells Fargo, agreed to buy NRG, a reinsurance unit of ING, and launched his own bond insurance business. And on Monday, Mr. Buffett reappeared on the deal scene, agreeing to help finance Mars’s $23 billion takeover of Wm. Wrigley Jr. Company.
But as The New York Times reported late last year, Mr. Buffett has repeatedly tried to blunt speculation that he might ride to the rescue of an ailing bank or Wall Street firm. In an interview at the time, he told the Times that the timing of his recent investments was a coincidence.
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