Berkshire buys homebuilder Taylor Morrison at 24% premium — grab the deal spread and ride the sector rally
Berkshire Hathaway, Warren Buffett's company, just announced it's buying homebuilder Taylor Morrison for $72.50 per share in cash — a 24% premium to Friday's closing price. This is Berkshire's first major deal under its new CEO.
Idea
Berkshire Hathaway buying Taylor Morrison at a 24% premium is a huge vote of confidence in the homebuilding sector. If TM hasn't fully reached the $72.50 offer price at the open, there's a near-free profit gap to capture. Beyond that, when a legendary investor like Buffett's company makes a big acquisition in a sector, other stocks in that same sector often get bid up too — investors start wondering who's next. Look at D.R. Horton and Lennar as the other large publicly traded homebuilders that could benefit from the halo effect.