Happy 87th Birthday, Warren Buffett! (August 30, 1930)
The 2nd Quarter 13-F statement is out, showing what stocks Berkshire Hathaway bought and sold last quarter. Dataroma has the best format for visualizing the changes.
Warren Buffett's Berkshire Hathaway builds stake in Synchrony Financial, trims GE position
Billionaire investor Warren Buffett built a new position in consumer finance company Synchrony Financial and boosted his holdings of Bank of New York Mellon by more than 50% in the second quarter of 2017, according to a regulatory filing Monday from Berkshire Hathaway.
Buffett's financial moves are closely watched by Wall Street. In the April-thru-June quarter, Buffett's Berkshire Hathaway also dumped the rest of its stake in General Electric (GE), selling the rest of its roughly 10.6 million share position. [...]
Buffett Nears a Milestone He Doesn't Want: $100 Billion in Cash
It’s a milestone Warren Buffett probably wishes he weren’t approaching.
Berkshire Hathaway Inc., the conglomerate he’s run for more than five decades, reported Friday that it held just shy of $100 billion in cash at the end of the second quarter.
While that figure highlights the staggering money-making ability of the businesses he’s collected over the years, it’s also a burden. Because Berkshire doesn’t pay a dividend and rarely buys back its own stock, Buffett is on the hook to find ways to invest those funds.
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Bankrupt utility company abandons $9 billion Warren Buffett deal
Bankrupt Texas utility Energy Future Holdings will abandon a deal to sell power transmission company Oncor to Warren Buffett's Berkshire Hathaway for $9 billion and will accept a $9.45 billion bid for Oncor by Sempra Energy instead, people familiar with the matter said.
The development represents a rare blow for Buffett, who avoids bidding wars for companies and had swooped in two months ago to buy Oncor after two previous attempts by Energy Future to sell it were blocked by Texas regulators. [...]
Buffett wouldn’t negotiate for Oncor. He lost the deal — and a $270 million termination fee
Warren Buffett got oohs and aahs when people thought he’d bagged a $270 million breakup fee after his Berkshire Hathaway Energy was outbid for Oncor by Sempra Energy, which won the company with a $9.45 billion offer. [...]
But, it seems, Berkshire didn’t get far enough along in its bid for Oncor to qualify for the fee.
Even if Berkshire could have claimed the full $270 million, some of that would have been offset by the costs — think lawyers, accountants, analysts, bankers — incurred by pursuing Oncor in the first place. [...]
Buffet's Oncor Failure Is No Failure at All
Reading headlines such as, "Buffett's Latest Dealmaking Flop," and "Buffett Encounters Rare Miss," might make some Berkshire investors wonder if the Oracle of Omaha has lost his touch. Adding insult to injury, the deal fell through too quickly for Berkshire to qualify for its $270 million breakup fee, so Buffett and Berkshire will walk away with nothing. [...]
While Berkshire shareholders (and, I'm sure, Buffett himself) may be disappointed, they should take comfort in Berkshire sticking to its principle of not getting involved in a bidding war. Bending on that principle this time could cause potential acquirees to negotiate harder in the future -- and those could be even larger deals. One wonders if 2015's $32 billion acquisition of Precision Castparts -- a deal 3.5 times bigger than Oncor -- would have happened on attractive terms had Buffett not stuck to his "one offer" policy.
As longtime Berkshire shareholder Steve Walman said in a recent Bloomberg article, "the minute he starts negotiating, he becomes everyone's favorite stalking horse and ends up as 'bid 'em up Buffett.'" Since Berkshire is built on acquisitions, cultivating a reputation for bending on price is not something Buffett wants to do. As he himself once said, "The smartest side to take in a bidding war is the losing side." [...]
Warren Buffett Likes Solar, but Not the Price Tag
Warren Buffett has called global warming a “major problem” and put his company’s money where his mouth is, spending billions to develop solar and wind power. Yet he’s no hero to some renewable energy proponents. Their beef: They say the utility arm of Berkshire Hathaway Inc., his conglomerate, has been trying to undermine an almost 40-year-old law intended in part to promote the growth of cleaner energy. Berkshire, they say, is effectively stifling solar projects to protect utilities it owns, such as PacifiCorp, based in Portland, Ore. [...]
Berkshire Hathaway Energy says it’s not so simple. The company, which owns several utilities using conventional and renewable power sources, is the second-largest owner of clean-energy assets in the U.S. But along with other utilities, it argues that the law is outdated, often raises costs for its customers, and forces utilities to buy more electricity than needed.
The law is called the Public Utility Regulatory Policies Act, or Purpa. Congress enacted it after the 1970s OPEC oil embargo to draw new players into the utility-dominated business of generating power. It required some utilities to buy power from certain power providers if doing so was less expensive than building new plants themselves. The idea was to boost the then-emerging natural gas industry—and perhaps spur renewables including solar.
The act worked—too well, from the standpoint of the utilities. As solar panel prices plunged in recent years, developers deluged utilities with projects to sell them power. Utilities complain the law is producing a surplus of power. Moreover, utilities say the contracts with developers, whose terms are generally set by state utilities regulators, often lock them in for years at high prices that don’t necessarily reflect the current market. [...]
Home Capital had two PE suitors but chose Buffett's bid to secure 'greatest acceptance' from markets
Alternative mortgage lender Home Capital Group Inc. fielded acquisition offers from two different private equity firms in June — one of which raised its bid even after the Toronto company decided to take Warren Buffett’s white-knight deal, according to a proxy circular released on Friday.
The two firms were not named in the document released ahead of a special meeting of shareholders next month, but sources familiar with the process say Home Capital’s two suitors were Onex Corp. and Brookfield Business Partners. [...]
After some consideration, Home Capital’s board rejected the sweetened offer, it said.
“The Board determined that the revised acquisition proposal was inferior to the (Berkshire) Transaction and that the Transaction was in the best interests of the Corporation and continued to provide Shareholders with the best combination of transaction certainty and the potential for enhanced Shareholder value, while meeting the need for strong sponsorship and lower cost standby debt financing,” it said. [...]
Larsen & Toubro sells unit to IMC International for Rs174 crore
(Larsen & Toubro is based in Mumbai, India. Rs174 crore is equivalent to around $27.2 million USD.)
Engineering major Larsen & Toubro Ltd (L&T) on Wednesday said it has agreed to sell its entire stake in its unlisted unit L&T Cutting Tools Ltd to IMC International Metalworking Companies BV, owned by Berkshire Hathaway Inc., for Rs174 crore.
L&T Cutting Tools, incorporated in 1952, manufactures fabricated metal products. [...]
Salton Sea geothermal plant canceled by Warren Buffett's Berkshire Hathaway Energy
It's been 14 years since California officials first approved the Black Rock power plant, which would have tapped a powerful geothermal reservoir along the shore of the Salton Sea and generated enough climate-friendly electricity to power about 200,000 homes. [...]
CalEnergy, which is owned by Warren Buffett's Berkshire Hathaway Energy, asked the California Energy Commission earlier this summer to terminate the license for Black Rock. The company had requested and received extensions of the construction start deadline in 2007, 2011 and 2014, but this time decided to move on rather than pay a $27,678 annual compliance fee that would have been due at the end of June. [...]
"Berkshire Hathaway is big. They've got a lot of wind, they've got solar, they've got other areas. (Geothermal is) a complicated thing to do," Kaspereit said.
Warren Buffett’s Best Advice...and Why He Doesn’t Own Gold
On what he looks for in businesses: "I want a very valuable castle, with a duke in charge of it who is very honest and hardworking and able. Then I want a moat around that castle."
On what he looks for in managers: "We look for three things: intelligence, energy, and integrity. If they don’t have the latter, then you should hope they don’t have the first two either. If someone doesn’t have integrity, then you want him to be dumb and lazy."
On why he doesn’t invest in gold: "You could take all the gold that’s ever been mined, and it would fill a cube 68 feet in each direction. For what that’s worth at current gold prices, you could buy all—not some—of the farmland in the U.S. Plus, you could buy 16 Exxon Mobils, plus have $1 trillion of walking-around money. Or you could have a big cube of metal. Which would you take? Which is going to produce more value?" [...]
Billionaire Warren Buffett serenades Gold Jacket Dinner
Warren Buffett and Paul Anka did it their way.
The billionaire investor and the crooner serenaded this year’s class of Pro Football Hall of Fame enshrinees with Anka’s song, “My Way,” at the Gold Jacket Dinner Friday night.
Anka sang a few lines of the song he wrote for Frank Sinatra before pausing to bring his friend, Buffett, to the Memorial Civic Center stage. [...]
