Warren Buffett famously avoids bidding wars. Here are 4 deals he’s missed out on because of that approach.

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  • Warren Buffett, the billionaire who runs Berkshire Hathaway, has long avoided engaging in bidding wars when buying companies. 
  • Buffett was recently outbid by Apollo Global Management for Tech Data, according to CNBC, and has said he will not make another offer.  
  • Here are four times that Buffett has lost out on a deal because he won’t participate in a bidding war. 
  • Read more on Business Insider.

Warren Buffett, the Omaha-based billionaire who runs Berkshire Hathaway, has long said that he doesn’t engage in bidding wars. 

He explained his thinking in the 2016 annual letter to Berkshire Hathaway shareholders. “We don’t participate in auctions,” he wrote. 

He continued: “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.'” 

This practice was recently put to the test when Berkshire Hathaway was outbid for Tech Data, a technology distributor, according to CNBC. Late Wednesday, Tech Data accepted a bid from Apollo Global Management for $145 per share, or $5.14 billion, which topped Buffett’s previous bid of $140 per share, or slightly more than $5 billion. 

Buffett said that he has no intention of making a higher offer, CNBC reported. Tech Data can solicit other bids until December 9, according to a company press release.

Now, it appears that Buffett will have to look elsewhere for opportunities to spend down his record $128 billion cash pile. In a 2018 letter to shareholders, Buffett wrote that Berkshire would like to spend its cash making acquisitions. 

However, it’s become increasingly difficult to find companies that are priced at a deal. “Prices are sky-high for businesses possessing decent long-term prospects,” Buffett wrote. Berkshire’s last major deal was its 2016 purchase of Precision Castparts Corp. for $32 billion. 

Here are four deals that Buffett has lost because he won’t engage in a bidding war, in chronological order.

1. Tech Data

Time of Berkshire Hathaway bid: November 2019

Berkshire Hathaway bid: $5 billion, or $140 per share 

Company that outbid: Apollo Global Management 

Winning bid: $5.14 billion, or $145 per share 

Source: CNBC

2. Oncor Electric Delivery

Time of Berkshire Hathaway bid: July 2017 

Berkshire Hathaway bid: $9 billion 

Company that outbid: Sempra Energy 

Winning bid: $9.45 billion 

Source: Business Insider

3. NYSE Euronext

Time of Berkshire Hathaway bid: Late 2012

Berkshire Hathaway bid: Undisclosed 

Company that outbid: Intercontinental Exchange  

Winning bid: $8.2 billion 

Source: CNBC

4. Constellation Energy

Time of Berkshire Hathaway bid: September 2008 

Berkshire Hathaway bid: $4.7 billion for 100%

Company that outbid: Électricité de France SA 

Winning bid: $4.5 billion for 49.9% stake

Sources: CNBC and The Wall Street Journal

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