- Warren Buffett's Berkshire Hathaway had $55.5 billion in cash on June 30, which is the first time the company ended a quarter on the fiscal calendar above $50 billion since Buffett became chairman and CEO, Bloomberg reports.
- $55.5 billion is more than twice the amount Buffett wants to have available to pay any unexpectedly hefty insurance claims and raises the notion that Buffett is waiting on a "fat pitch" to make a big acquisition.
Electric utilities are known to be among Buffett's preferred M&A targets with Berkshire having recently acquired NV Energy for $5.6 billion and moving to buy Canadian transmission company AltaLink. "We're going to keep [investing in energy] as far as the eye can see," Buffett said at Edison Electric Institute's (EEI) annual meeting.
But who could Buffett buy? There a few possibilities.
Bankrupt Energy Future Holdings' transmission and distribution utility Oncor is up for auction and is viewed by many analysts as a premium asset located in Texas' growing economic environment. Buffett could make a bid for the utility, but only if it comes at a friendly price and boasts attractive returns.
Wisconsin Energy, which recently moved to buy Integrys for $5.8 billion, is another candidate thanks to its good management and favorable regulatory environment, both of which Buffett is known to like.
Finally, there's Alliant Energy, which operates in the same regions as Berkshire Hathaway Energy, and Westar Energy, which is currently pursuing one of the largest utility capital investment programs in the U.S. Buffett prefers bolt-on acquisitions that offer further returns in places where he already has a foothold, according to Robert Miles, an authority on Buffett and Berkshire Hathaway. And the promise of a healthy capital spend program is pretty hard to pass up when you've got as much money as Buffett does.
Only time will tell whether Buffett lays out the cash on one of these big utilities. Stay tuned.