Berkshire snaps up Taylor Morrison at 24% premium — play the deal gap and homebuilder spillover
Warren Buffett's Berkshire Hathaway is buying homebuilder Taylor Morrison for $72.50 a share in cash — a 24% premium over Friday's closing price. It's the first major deal under Berkshire's new CEO Greg Abel.
Idea
Berkshire is paying $72.50 cash per Taylor Morrison share, so any price below that is essentially a guaranteed profit if the deal closes on schedule. The bigger story is what this signals: Buffett's successor just made his first big acquisition in homebuilders, which tells the market this sector is cheap. Other publicly traded homebuilders like D.R. Horton, Lennar, and Toll Brothers could rally as investors speculate about more takeovers. A Berkshire endorsement also implies that housing fundamentals are stronger than the market has been pricing in.