Might Buffet Have an Appetite For Sysco?

The chairman of Omaha, Nebraska-based Berkshire Hathaway Inc., who took a four-country tour of Europe last year in search of targets, told Bloomberg Television last week that he’s now most likely to pursue U.S. deals after the Standard & Poor’s 500 Index sank to the lowest level since 1996 this month. While the credit crisis is preventing rival bidders from borrowing money, Buffett has $25.5 billion in cash to deploy, according to the report.
The world’s most successful investor is seeking acquisitions after his company suffered the biggest annual drop in book value since he took control four decades ago. Sysco, writes Bloomberg reporter Elizabeth Stanton, is among 50 companies that meet his standards.
Buffett, 78, is reportedly seeking to spend $5 billion to $20 billion on an acquisition. He prefers “simple” businesses with pretax profit exceeding $75 million, “consistent earnings power,” “good” returns on equity and little or no debt.
Bloomberg data show that Sysco trades for 12.7 times profit of the past 12 months. Its stock price this morning was $22.88.

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