Berkshire Hathaway sells over 245 million shares in Tesco

Warren Buffet’s investment company Berkshire Hathaway has sold over 245 million shares in the UK supermarket chain Tesco.

Berkshire Hathaway used to own 3.7% of Tesco, worth about £1 billion. This sale reduces the company’s stake in the supermarket to under 3%.

Warren Buffet recently said that his decision to invest in Tesco was a “huge mistake”.

Mr Buffett told CNBC earlier this month:

“I made a mistake on Tesco. That was a huge mistake by me,”

Over the last 52 weeks Tesco’s share price has dropped by more than 50%, with disappointing sales results (well below what analysts had forecast) and accounts mis-reporting.

Tesco issued a series of profit warnings and overstated its expected half-year profits by approximately £250 million. Internal investigations are being carried out regarding the accounting irregularity, and the Financial Conduct Authority is also investigating the issue.

Tesco is one of the UK’s leading supermarket chains.

The supermarket chain has has faced fierce competition from discount retailers, such as Lidl and Aldi. In addition, some of the company’s international ventures have not done well.

Berkshire Hathaway began investing in Tesco in 2006 and by 2012 the investment company had more than a 5% stake in the business.

Mr Buffet is not the first major investor to start selling Tesco stake, in September the investment giant Blackrock began reducing its 5% stake in the company too.