Warren Buffett has bought his hometown newspaper in a deal that defies the billionaire investor's scepticism about the future of the industry.
11:45AM GMT 21 Nov 2011
Tesco is struggling in Britain with cash-strapped consumers putting fewer items in their shopping basket and many consumers trading down to discount chains such as Aldi and Lidl.
However, Mr Buffett, who has held Tesco shares since at least 2007, said he wanted to increase his stake from above his current 3.6pc.
Back in September he bought another 34m shares in Tesco when the share prices was 371p, taking his stake from 3.2pc.
Mr Buffett, asked whether he saw attractive valuations for a long-term investor in Europe, said: “Not in the debt space but certainly in the equity space."
He singled out Tesco as his top pick. "If the price came down some on Tesco I’d buy some more of that,” he told CNBC.
Buffett said his criteria for investing in European companies were the same as they were in the United States.
"I don’t worry about whether they have emerging market exposure," Mr Buffett said, adding: "I’ve used the same criteria for 60 years."
“Obviously the prices in Europe make a lot more sense than a year ago,” he added.
Tesco's share price this morning fell 3.62 to 392.08p.
He voiced concerns over the long-term future of the Euro. Asked whether the euro zone would still exist in ten to 20 years, he said: "There is a major flaw in the euro system ... I do know the system as presently designed has a major flaw and that flaw won't be corrected just by words."
Mr Buffett made his comments while on a trip to Japan, which had been postponed after April's devastating earthquake and tsunami. He posed for photographs with workers from the Fukushima plant and held a sign saying "Never give up, Fukushima". The nearby nuclear power station leaked radiation after being hit by the earthquake and tsunami.
It emerged last week that Buffett had made an $11bn (£7bn) investment in IBM. His name is also frequently mentioned as a possible provider of new capital for European banks – although he said he was unsure how the eurozone debt crisis would end, and that his investment firm Berkshire Hathaway was not considering a direct European investment.
