TECD Tech Data Corporation

By Nicole Friedman 

Berkshire Hathaway Inc. offered about $5 billion for technology distributor Tech Data Corp. last week, but it was outbid by Apollo Global Management, said Warren Buffett, Berkshire's chairman and chief executive.

The rare insight into a Berkshire deal that fell through illuminates the challenges facing the Omaha, Neb., conglomerate as it looks to spend its growing cash pile. Berkshire had a record $128 billion in cash as of Sept. 30, and Mr. Buffett is eager to spend it on acquisitions and large investments. But he is unwilling to pay prices that he sees as unreasonably high, and the competition from private-equity firms and other large investors is fierce.

Tech Data late Wednesday said it has agreed to be acquired by Apollo for $145 a share in cash, or slightly more than $5 billion not including debt, a $15-a-share increase from Apollo's offer earlier in November.

After Apollo made its earlier offer for Tech Data, Bank of America approached Berkshire portfolio manager Todd Combs last week about buying the company, Mr. Buffett said in an interview. Mr. Combs is one of two portfolio managers at Berkshire and a key lieutenant for helping Mr. Buffett make investments and vet potential deals.

Mr. Buffett said he read the company's financial statements and investor presentations and was immediately interested.

"It was our kind of business. It's one you can understand," Mr. Buffett said. "I may not understand all of the products that they sell and I may not understand what the customers who buy the products do with them, but I do understand the middleman's role."

Greg Abel, Berkshire's vice chairman for noninsurance business operations and another of Mr. Buffett's top lieutenants, visited Tech Data's headquarters in Clearwater, Fla., last Friday. Berkshire then made an offer to buy the company at $140 a share.

Tech Data's board of directors approved the deal, Mr. Buffett said, but Apollo raised its offer this week. Berkshire famously doesn't participate in bidding wars, and it declined to raise its price.

Berkshire's role in the bidding was reported earlier by CNBC.

Tech Data shares recently traded 12% higher at $144.89.

Representatives for Tech Data and Apollo declined to comment.

Write to Nicole Friedman at nicole.friedman@wsj.com

(END) Dow Jones Newswires

November 29, 2019 13:54 ET (18:54 GMT)

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