Buffett says Berkshire “not competitive” with SPACs in deals By Reuters

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© Reuters. FILE PHOTO: FILE PHOTO: Warren Buffett, CEO of Berkshire Hathaway Inc, pauses while playing bridge as part of the company’s annual meeting on the weekend in Omaha

By John McCrank (Reuters) – Warren Buffett on Saturday compared the buying frenzy by special purpose acquisition companies, or SPACs, to gambling with other people’s money and said their activity has made things difficult for his company, Berkshire. Hathaway (NYSE 🙂 Inc, to compete in offers. Berkshire Hathaway has between $ 70 billion and $ 80 billion that it “would love to put to work,” but has not been able to do so under current conditions, said President and CEO Buffett. “He’s a killer. SPACs generally have to spend their money in two years, as I understand it. If you point a gun at my head and tell me you have to buy a big business in two years, I’d buy one, but it wouldn’t a lot of one. We look and we look, “Buffett said at the Berkshire annual meeting. SPACs are publicly traded shell companies that raise funds to acquire private companies and go public, allowing targets to circumvent the more onerous regulatory controls of an initial public offering. American SPACs, also known as blank check companies, have raised more than $ 100 billion so far this year, while the value of SPAC’s mergers and acquisitions reached a record $ 263 billion, according to data. by Dealogic. “It’s a different equation that you have if you’re working with other people’s money where you get an advantage, and you have to pay it back if you don’t do something, and frankly, we’re not competitive with that,” he said. There are companies that are interested in being acquired by Berkshire, but it would be difficult for them to do so because a SPAC bidder would counter with a higher bid, Buffett said. “That won’t last forever, but that’s where the money is now,” he said.

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