Buffett Says Investing in Activision Before Acquisition Wasn’t a “Bonanza”

Warren Buffett said Berkshire Hathaway’s recent investment in Activision was “no bonanza” for the manager, and was made without knowing that the video game maker would receive a takeover offer from Microsoft.

In a letter released by Buffett’s office on Thursday, the investor said one of his investment managers paid about $77 a share for Berkshire’s acquisition of 14.7 million Activision shares.

About 85% of the position was assembled in October and the rest in November, according to him.

Buffett also claimed that Berkshire had “no prior knowledge” that Microsoft was working on a $68.7 billion acquisition of Activision, a transaction announced Jan. 18. The production company owns video game franchises including “Call of Duty” and “Candy Crush”.

The investor did not say which manager, Todd Combs or Ted Weschler, made Berkshire’s roughly $1.1 billion investment.

Buffett sent his letter to several media outlets that reported the investment, after one incorrectly reported that Berkshire paid an average of $66.53 a share for its stake in Activision, not $77.

The news in question was later corrected.

Buffett said the investment manager could have raised his stake after the merger was announced, when Activision once traded at about $78 a share. “The purchase was no bonanza for him or Berkshire,” Buffett wrote.

Activision shares tumbled in November amid allegations of sexual harassment by employees and misconduct by several high-ranking managers.

The shares closed on Thursday down 49 cents at $80.97 each, below Microsoft’s $95 a share takeover bid. Analysts expect the merger to run into difficulties with antitrust regulators.

Berkshire vice-chair Charlie Munger on Wednesday called Activision boss Bobby Kotick “one of the smartest business executives I know.”