Tesco Plc said Warren Buffett’s Berkshire Hathaway Inc. cut its stake in the troubled retailer to less than 3 per cent after the billionaire said his eight-year investment was a “huge mistake.”
Berkshire had held 3.7 per cent at 31 December, according to its annual report. Tesco shares have declined 49 per cent this year as the grocer struggles to recover from overstated profit forecasts, lost market share and an overhaul of top management.
Buffett has owned a stake in the Cheshunt, England-based grocer since March 2006, when Berkshire bought shares for $328.7 million. By 2012, the holding had reached 5.08 per cent, worth more than £1 billion ($1.6 billion).
“I made a mistake on that one,” Buffett, 84, said in an interview with CNBC this month. “That was a huge mistake by me.”
Buffett didn’t immediately respond to a message left with an assistant seeking more information about the current size of Berkshire’s Tesco holding and his reasons for selling shares.
Tesco Chief Executive Officer Dave Lewis, who took the helm last month, will present earnings next week and provide an update on the investigation of how the company overstated its profit forecasts. Eight employees have so far been suspended in the probe, which is looking at how Tesco booked some income before it was earned and costs after they were incurred.
Bloomberg News, edited by ESM
