BILLIONAIRE US investor Warren Buffett has nudged up his stake in retailer Tesco in what is being seen as a vote of confidence in new chief executive Phil Clarke.
Buffett’s Berkshire Hathaway last has bought around 34m Tesco shares for about £120m, lifting its stake in the British supermarket group to 3.64 per cent from 3.21 per cent.
Earlier this year, Buffett caused a stir by saying he thought Tesco should “look hard” at its loss-making Fresh & Easy chain in the United States. Clarke, who succeeded long-serving predecessor Sir Terry Leahy in March, has laid out a plan for the chain to significantly reduce its losses.
He has made changes such as introducing fresh bakery products and coffee and testing a loyalty card as well as triggering a price war by making reductions on thousands of lines.
Buffett, the so-called Sage of Omaha, has been supportive of Tesco for some time.
His holding went past three per cent back in 2007. Last month Berkshire Hathaway invested $5bn (£3.2bn) in struggling Bank of America and its share price has fallen 17.5 per cent since.
Separately the Berkshire Hathaway board yesterday authorised the business to buy back an indefinite amount of its stock. It would be the first buyback under Buffett and indicated that the conglomerate may not be enjoying the returns on its investments it had expected.