Billionaire investor Warren Buffett and his Berkshire Hathaway Inc. (NYSE: BRK-A) (NYSE: BRK-B) turned down an opportunity to put some of its $128 billion in cash to use and buy jewelry company Tiffany & Co. TIF, the Financial Times reported.

Buffett Passes On Tiffany

Buffett has a history with Tiffany, as the "Oracle of Omaha" bought $250 million worth of Tiffany bonds back in 2009.

But when the upscale luxury company was looking to sell itself completely, Buffett politely passed on a deal, sources told FT.

Buffett did confirm that acquisition talks took place, but additional details are scarce.

Tiffany ultimately sold itself to France-based global luxury behemoth LVMH Moet Hennessy Louis Vuitton SA Unsponsored ADR (OTC: LVMUY) for $16.6 billion including debt.

Regulatory documents Tiffany released last week show the company and its bankers approached four potential alternative bidders, according to FT.

None of the parties showed any interest in entering a bidding war against LVMH.

Berkshire 'Flush With Liquidity' 

Buffett could have bought Tiffany for what is essentially a small part of its massive cash hoard. His continued passive stance on M&A deals is becoming a hotly contested topic among some Berkshire investors.

"There are investors that are frustrated," Edwards Jones analyst Jim Shanahan told FT. "He's flush with liquidity and will be ready when opportunities emerge, but we need a pullback here for those opportunities to emerge."

Shanahan also told FT Berkshire competes against other private equity firms that are also flush with cash on the sides and are "willing to be more aggressive than he is."

Buffett's M&A Strategy 

Smead Capital Management's Bill Smead told FT that Buffett can take his time and patiently wait for the next big opportunity. When Buffett does decide to put cash to use in a large deal, "shareholders will benefit tremendously," he said.