Buffett heads to the checkout with £300m of Tesco shares
BILLIoNAIRe Warren Buffett has slashed his stake in Tesco by about one-fifth, selling £300 million of shares.
Buffett’s Berkshire Hathaway investment vehicle cut its holding in the supermarket chain to just under 4 per cent, from just under 5 per cent.
The move came two weeks after Tesco posted a decline in its first-half profit as earnings from mainland europe tumbled 68 per cent, and the grocer struggled to regain market share in its home market.
The world’s third-biggest retailer has been losing market share to rivals Asda and Sainsbury’s, as well as smaller budget operators such as Aldi and Lidl.
Tesco has suffered in recent years from failed attempts to break into Japan and the United States, and a costly, still unprofitable, expansion in China.
Buffett publicly backed Tesco when the grocer issued a profit warning early last year, using the subsequent share price fall as an opportunity to buy.
The day after the warning triggered a 19 per cent fall in the shares to a low of 311p, he upped his holding from 3.2 per cent to 5.1 per cent.
His sale of most of those shares last week was made at a considerable profit, with the stock now back above the 370p mark.
The sale coincided with Berkshire’s agreement last week to buy two businesses from engineering company IMI for £690m.
earlier this month, Tesco insisted that its turnaround efforts are bearing fruit, even as overseas problems sliced almost a quarter off its first-half profits.
And the UK’s largest grocer recently decided to relinquish control of its 134 loss-making Chinese stores. They will be swallowed by a state-owned rival, with Tesco taking a minority stake in the venture.