“Those days are gone”, Lawrence Cunningham, a professor at George Washington University and author of the book “Berkshire Beyond Buffett”, said in an interview. Precision Castparts operates a plant in Redmond, PCC Schlosser, which manufactures titanium castings for jet aircraft engines and other products.
Berkshire already held a 3% stake in the company, valued at more than $880 million. He said he hopes to see Berkshire Hathaway bring more horsepower to PCC Schlosser.
“They’re not much into turnarounds, siphoning off of assets, rejiggering stuff to be sold”, Lee said.
With many U.S. companies boosting their earnings per share by cutting costs and buying back stock instead of by growing their businesses, stock valuations remain a concern.
Berkshire’s offer of $235 per share is a premium of 21.2 per cent to Precision Castparts’ Friday close of $193.88.
Precision Castparts’ stock soared $36.97, or 19%, to $230.85 a share after the deal was announced.
Groh, a Lake Oswego-based analyst with D.A. Davidson, said Precision Castparts’ stock decline in the last year was driven mostly by weakness in the oil and gas markets and a few timing issues with aerospace customers.
(6) An offering price (we don’t want to waste our time or that of the seller by talking, even preliminarily, about a transaction when price is unknown).
On Monday, Warren Buffett fired his so-called “elephant gun” at Precision Castparts, after his firm Berkshire Hathaway Inc. Its shares yesterday were trading at $214,909.94, flat on the day.
“We are fully compliant with PCBG funding requirements, ERISA guidelines and are mindful of our fiduciary responsibilities to the beneficiaries of the fund”, Precision said in a statement. “I think quite the opposite”. It has 155 manufacturing facilities around the world.
Soon after that meeting, Buffett asked one of his investment managers, Todd Combs, to contact Precision about a bid. Buffett said he met Precision’s CEO, Mark Donegan, at the Allen & Co.
The dollar.DXY slipped 0.39 percent against a basket of currencies after hitting a four-month high last week.
Buffett seemed unperturbed by that recent history when talking about the deal on cable news channel CNBC.
The massive investment by Mr. Buffett in the company suggests that he expects Precision to do well in the future.
The acquisition of the aerospace company is one of Buffett’s largest deals ever.