Buffett says Berkshire Hathaway on the prowl for acquisitions

OMAHA, Neb. — Billionaire investor Warren Buffett says he needs all of five minutes to decide whether to buy any company interested in being acquired by Berkshire Hathaway. The company is hunting acquisitions priced between $5 billion and $20 billion, CEO Buffett said in Berkshire's annual report.

Buffett, in his annual report, expressed dismay that he failed to buy more companies in this year's report, the 40th from the man known as the "Oracle in Omaha."

"My hope was to make several multibillion dollar acquisitions that would add new and significant streams of earnings to the many we already have," the 74-year-old wrote in the report, released Saturday. "But I have struck out."

But Buffett did have a consolation prize. Berkshire Hathaway posted a gain in net worth of $8.3 billion in 2004, which increased the per-share book value — assets minus liabilities — by 10.5 percent. That was keeping nearly in line with the S&P 500, which grew by 10.9 percent. That latter growth meant a "remarkable year for the stock market" because it came close to the S&P 500's annual return of 11.2 percent, he said.

In 2003, the company saw a 21 percent increase in book value while the S&P 500 grew by 28.7 percent.

Buffett and vice chairman Charlie Munger are going to have to work hard to find new assets, said Steve Kaplan, a professor at the University of Chicago Graduate School of Business. Like the past year, 2005 will prove a seller's market, Kaplan said, adding that activity in mergers and acquisitions will remain heavy.

"He won't find anything this year either," Kaplan said. "Since he likes to buy things cheap, it's harder to find."

While Berkshire's profit fell 10 percent from 2003 to $7.31 billion, its fourth-quarter results were strong, with net earnings climbing to $3.34 billion, up some 40 percent from the same period in 2003.

Berkshire ended the year with $43 billion of cash equivalents, something Buffett called "not a happy position." In 2003, Berkshire had nearly $36 billion and the year before that, about $12.7 billion.

Buffett, known widely as the "Oracle of Omaha" for his insight into all things financial, was mum on the subject of an investigation of alleged bid-rigging and price-fixing in the insurance industry by New York Attorney General Eliot Spitzer. Buffett received a subpoena in January and has said he would cooperate. His insurance holdings include auto insurer Geico.