Buffett says Berkshire's Activision purchase was 'no bonanza'

[NEW YORK] Warren Buffett said Berkshire Hathaway's recent investment in Activision Blizzard has been "no bonanza" for Berkshire, and was made without knowing the video game maker would receive a takeover offer from Microsoft.

In a letter released by Buffett's office on Thursday (Feb 17), Buffett said one of his investment managers paid about US$77 per share for Berkshire's 14.7 million Activision shares, acquiring about 85 per cent of his position in October and the rest in November.

Buffett also said Berkshire had "no prior knowledge" that Microsoft was working on a US$68.7 billion takeover of Activision, whose franchises include Call of Duty and Candy Crush, announced on Jan 18.

He did not say which investment manager, Todd Combs or Ted Weschler, made Berkshire's approximately US$1.1 billion investment.

Buffett sent his letter to various media that had reported on the investment, after one incorrectly said Berkshire paid an average of US$66.53 per share for its Activision stake, not US$77.

That report was later corrected.

Buffett said his investment manager could have amassed his stake after the merger was announced, when Activision sometimes traded at around US$78 per share. "His purchase was no bonanza of any sort for him or Berkshire," Buffett wrote.

Activision shares fell in November amid accusations concerning sexual harassment of employees and misconduct by several top managers.

The shares closed Thursday down 49 US cents at US$80.97, below Microsoft's US$95 per share takeover offer. Analysts expect the merger will get tough antitrust scrutiny.

Berkshire vice-chairman Charlie Munger on Wednesday called Activision chief Bobby Kotick "one of the smartest business executives I know". Munger spoke at the annual meeting of Daily Journal Corp, the newspaper publisher and legal software company he chairs. REUTERS