Hold for Mr. Buffett Please: a bit of the back story

My cover story for this week's Bloomberg BusinessWeek appears on newsstands today and on BusinessWeek website (read it here).

It opens: "Who wouldn't love to pick up the phone and ask Warren Buffett for advice? People have spent more than $1 million just to have lunch with the man. He was voted the most admired corporate director in America by Directorship magazine in 2008. Chief executives of companies he has a stake in laud his patience, foresight, and ability to capture the essence of a complex financial situation in just a few words. They also like the fact that he usually leaves them alone as long as they're getting the job done.

Sometimes Buffett emerges from behind his desk and shows a side of himself that's far less familiar. When he sees something he doesn't like in a company whose shares he owns, the famously passive investor can swing into action to protect his investment—jawboning behind the scenes, scolding, cutting opportunistic deals, even hiring and firing CEOs. For some of those on the receiving end of his activism, it can feel a bit like being attacked by Santa Claus."

In researching, I talked to a lot of CEOs, as well as got behind the scenes on Kraft & Moody's. People are interested in what really happened there. Reporting this story was an opportunity to start developing some insight into the relationships between these companies managements and Warren.

CEOs who've had a rocky relationship with Warren don't want to talk about him. Sometimes you can talk to other people who will speak on their behalf (more or less officially). There may be some other interesting stories out there, but the people who know them are not talking as of now.

When it came to Kraft, NO investors I spoke with would criticize Warren for attribution. Several were quite critical on background or off the record. They just don't want their names in print. 

I heard all sorts of theories of what really motivated him to be so upset at Irene Rosenfeld. These were largely speculation, some in jest. (From a hedge fund manager: "For the longest time he could get all the women he knew to do exactly what he wanted and now there is a trend going the other way.")  The pizza business is the real problem. It was sold in an enormously tax-inefficient way; wasting money is a matter of principal to Warren, almost an ethical issue. One person who is close to him said "Businesses like that are rare and hard to acquire" so that it's really hard for Warren to watch one slip away like that at a price that's inappropriately low, especially when he would have liked to own it himself.

As Jim Kilts says in the article, it's never personal. It's always business.