Cambridge's Trinity College buys 50 % stake in Tesco stores for £450 mn
30 Jan 2012
Trinity, the wealthiest college at the UK's Cambridge University, has acquired a 50-per cent stake in a portfolio of Tesco Plc stores, for £450 million ($700 million), 10 days after billionaire investor Warren Buffett's Berkshire Hathway increased its stake in the world's fourth-largest retailer.
Last week the college acquired the 11 stores alongside a Tesco subsidiary in a deal financed through the issue of a £450-million commercial mortgage-backed security, the Sunday Telegraph yesterday reported, without saying where it obtained the information
The deal comes after Warren Buffett this month increased his stake in Britain's largest supermarket chain from 3.21 per cent to 5.08 per cent by acquiring an additional 1.87 per cent, for around £520 million. (See: Warren Buffett increases stake in UK supermarket chain Tesco)
The oracle of Omaha made the investment despite Tesco this month issued a shock profit warning that saw its stock plunging by 16 per cent or £5 billion after the company missed Christmas sales expectations amid global market turbulence. Its current market capitalisation is just under £26 billion.
Warren Buffett first invested in Tesco in 2007, and said in November 2011 that he would invest more ''if the price came down.''
Under the Trinity deal, Cheshunt-based Tesco spun-off a £450-million portfolio of 11 stores into a joint venture, which include stores in London, Bradford and Doncaster, as well as a development site in Woolwich, south-east London, according to the report.
