Berkshire News Briefs - 10/29/13

Ketchup changeup: McDonald's dropping Heinz after CEO change (Reuters)

McDonald's Corp on Friday said it plans to end its 40-year relationship with ketchup maker H.J. Heinz Co, since that company is now led by Bernardo Hees, the former chief executive of hamburger rival Burger King Worldwide Inc. "As a result of recent management changes at Heinz, we have decided to transition our business to other suppliers over time," McDonald's said in a statement.

Buffett's Berkshire cuts Tesco stake by $485 million (Chicago Tribune / Reuters)

I think the Tesco sale is related to Marmon's IMI purchase... Berkshire keeping UK money in the UK to avoid the tax issues of moving money to and from the US.

Billionaire Warren Buffett's Berkshire Hathaway Inc has slashed its stake in Britain's Tesco by 300 million pounds ($484.75 million), weeks after the world's No.3 retailer posted disappointing half-year results. [...] Berkshire, a Tesco shareholder since 2006, cut its holding to 3.98 percent from 4.98 percent on October 16, filings on the London Stock Exchange website showed. However it still remains one of its biggest investments outside the United States. Berkshire's Marmon Group had announced on the same day that it had agreed to buy two businesses from British engineering company IMI for 690 million pounds.

Buffett: Why I didn't buy the Washington Post (CNN / Fortune)

As the Graham family exits emotionally from the Washington Post newspaper, and new owner Jeff Bezos stays mum about his plans, some fresh details about who did not buy the paper have emerged. Participating in a Q&A last week at Washington's Metropolitan Club, Warren Buffett, 83, spoke of his long-term affection for the paper and said he had "briefly" considered buying it when it went on sale earlier this year. But he then decided the purchase wouldn't work.

MidAmerican Energy Holdings Company Earns No. 1 Spot in Industrial Customer Satisfaction Among U.S. Electric Utility Companies (Business Wire)

MidAmerican Energy Holdings Company ranks No. 1 in the U.S. for overall customer satisfaction among large commercial and industrial customers of electric utility holding companies, according to 2013 data released this week by TQS Research, Inc. The company’s ongoing emphasis on customer satisfaction and sharing of best practices resulted in all three of MidAmerican Energy Holdings Company’s U.S. utilities – MidAmerican Energy Company, Pacific Power and Rocky Mountain Power – contributing to the top ranking. MidAmerican Energy Company, based in Des Moines, Iowa, earned a very satisfied rating of 95.4 percent from the large commercial and industrial customers included in the survey.

Jain feeds Buffett’s hunger (Insurance Insider)

This story is really "inside baseball" about the insurance industry, and very heavy on the metaphor, which you can see from the intro.

People are starting to worry about him. The changes in diet. The idiosyncratic decisions. The silence. He isn't quite the man he used to be, isn't quite himself. Everyone is talking about it: speculating about his motives, glossing his actions, promulgating theories, kvetching about its implications. Which is to say that Ajit Jain, the softly spoken, smiling carnivore par excellence of the reinsurance world has of late taken up omnivorous habits. Where Jain was previously notorious for holding aloof until he scented blood, then attacking ferociously and making off with hefty chunks of red meat in his mouth, the last two years have seen him extend his diet in surprisingly catholic ways.

Willis to Allocate Risks to Insurers Including Berkshire (Bloomberg)

Willis Group Holdings Plc, the third-largest insurance broker by market value, agreed to allocate as much as 25 percent of premiums from the London corporate specialist market to pre-selected insurers. Underwriters in the group include Warren Buffett’s Berkshire Hathaway Inc., People’s Insurance Company (Group) of China Ltd. and Hiscox Ltd., said Colleen McCarthy, a spokeswoman for the London-based broker. [...] Aon Plc, the second-largest broker, announced a similar deal with Omaha, Nebraska-based Berkshire in March to shoulder risks from the Lloyd’s of London market. Berkshire agreed to provide Willis’s clients additional coverage for oil drilling following BP Plc’s 2010 spill in the Gulf of Mexico.

Johns Manville expands micro glass fibre nonwoven capacity in Germany (Innovation in Textiles)

I'm mostly including this link because I don't find opportunities to talk about Johns Manville very often.

Johns Manville, a Berkshire Hathaway company and a leading manufacturer of premium-quality building, specialty and filtration products, has completed an expansion of its micro glass fibre nonwoven production for air filtration media in its plant in Wertheim, Germany. The company’s micro glass fibre nonwovens are used as top-performance media in HVAC filtration applications and also as aircraft insulation. The company also recently announced an additional investment of EUR 32 million in a state-of-the-art PET spunbond line for filtration products at its production site in Berlin.

Also, the nationwide rebranding of "Prudential Real Estate" into "Berkshire Hathaway Real Estate" continues on, with Austin and Kansas City the major markets making the switch in the past week. I gave up on posting all the press releases from all the real estate brokerages and all the small-town newspaper business section stories, but this story is still in progress.

The Buffetts on Charity, Succession, and TV (Bloomberg Video)

Berkshire Hathaway chairman/CEO Warren Buffett, board member Howard G. Buffett and Howard W. Buffett, executive director at Howard G. Buffett Foundation, talk with Betty Liu about their book “40 Chances,” their philanthropic endeavors, succession at Berkshire Hathaway and Warren Buffett’s love of the TV show “Breaking Bad.” They speak on Bloomberg Television’s “In The Loop.”

Warren Buffett shows off his ukulele skills (Today)

"Now, here it is, your moment of zen..."

Warren Buffett — business mogul, investor, philanthropist ... ukulele player? The 83-year-old financial legend stopped by TODAY with son Howard G. Buffett and grandson Howard W. Buffett to discuss their new book "40 Chances" but also showed off his lesser known talents in the Orange Room: singing and playing the ukulele. As if the billionaire doesn't have enough going for him. He said he learned to play in college for an age-old reason. "I play off and on, but I just wanted to impress a girl I was keen on," Buffett said. "It didn't work."

Berkshire News Briefs - 6/23/13

Buffett Nets Cool $44 Million in Quiet Media General Deal (MoneyNews)

The merger of Media General and New Young Broadcasting led to a benefit for Warren Buffett's Berkshire Hathaway [...] the story begins with Buffett and Berkshire Hathaway purchasing all of Media General's newspapers, except the Tampa Tribune, in May 2012. Berkshire Hathaway loaned Media General $445 million "to refinance a crushing debt load coming due," Poynter stated. The initial interest rate was 10.5 percent. Berkshire Hathaway got penny-a-share warrants to acquire 19.9 percent of the company. A benefit of the merger: Media General said last week it will be able to refinance its debt "at a considerable savings of interest expense." Poynter reported that Berkshire Hathaway will reportedly be paid a $44 million premium as part of the refinancing. Media General’s shares skyrocketed more than 30 percent the day the merger with New Young Broadcasting was announced, and have roughly doubled in value since Buffett’s investment just over a year ago.

Buffett's Berkshire Hathaway Jumps Over Allstate as No. 2 Insurer (Property Casualty 360)

Warren Buffett’s Berkshire Hathaway, led by the group’s auto-insurance subsidiary Geico, leapt over Allstate in 2012 to become the second-largest P&C insurance group based on net premiums written [NPW], according to data from SNL Financial. [...] The Berkshire group saw a 2012 increase in NPW of 12.1 percent—the largest such growth in the Top 20 P&C insurance groups. Berkshire's NPW was about $27.25 billion. Allstate slipped to No. 3, with NPW of about $25.58 billion, which is still a 1.4 percent increase over 2011. State Farm by leaps and bounds retained its title as the largest P&C group in 2012, with nearly $53 billion in NPW.

MidAmerican to issue $700 million in bonds to fund Solar Star projects (Clean Energy Authority)

MidAmerican Solar, a subsidiary of Warren Buffet-controlled Berkshire Hathaway’s Mid-American Energy Holdings Co. is planning to issue $700 million in secured senior notes to support the $2.7 billion Solar Star project, which was formerly known as the Antelope Valley Solar Projects. The bonds, beings issued by Solar Star Funding, LLC, will support construction of the Solar Star projects, which MidAmerican bought from SunPower in January 2013. SunPower is currently building the Solar Star projects, which, when completed in October 2015, will consist of 597 megawatts of AC electric generation. Once complete SunPower will provide ongoing operations and maintenance of the projects, which are co-located in Kern and Los Angeles Counties, Calif.

An Interview with Whitney Tilson (Fool Video with Transcript)

[Whitney Tilson:] The way I value Berkshire is only secondarily as a multiple of book value, because book value is such an incorrect way to look at so many of Berkshire's holdings. Something like GEICO is being carried at book, but it's worth a significant premium to book. [...]

But again, this is a good example of the "I missed it" phenomenon. I think a lot of people look at Berkshire today and just say, "The A shares have run from closer to $100,000 a share to over $160,000 a share in not much more than a year. I've missed it." Well, people have been saying "I missed it" on Berkshire...When it ran from $100 to $1000, they said "I missed it," and then $1000 to $10,000, then $10,000 to $100,000. Each time, they didn't miss it. They just had to wash that thought from their brains, and evaluate it. I value Berkshire, just taking the cash and investments per share, as a little over $120,000 a share. Then I just put an eight multiple on the pre-tax earnings of the operating businesses, about $9000 a share. You take $9000 a share of earnings, times an eight multiple is $72,000 per A share. Add the cash bonds and investments of $120,000 per share, and you get a bit over $190,000 per share of intrinsic value.

Buffett: Tracy Britt isn't Berkshire CEO successor (Omaha World-Herald)

Last week's item following up on a Wall Street Journal profile of Warren Buffett's financial assistant Tracy Britt stretched toward the question of whether she might, someday, succeed him as CEO of Berkshire Hathaway Inc. Seemed like the logical question to explore, as others have done in print and online. But not exactly, Buffett said in an email (relayed from his computer-less office through his assistant, Debbie Bosanek). [...] Britt's office is a ways down the hall, not next to his, as the Journal article said. The office sequence, in footage away from Buffett's corner office, is Bosanek, Todd Combs, Britt and Ted Weschler. Combs and Weschler manage some of Berkshire's investments.

Berkshire’s Abel, Britt Join Heinz Board After Swann Leaves (Bloomberg Businesweek)

Gregory Abel and Tracy Britt, two of Warren Buffett’s deputies who have been adding responsibilities at Berkshire Hathaway Inc. (A), were selected by the billionaire to join him as directors of HJ Heinz Co. [...] They replaced directors including Lynn Swann, the former wide receiver for the National Football League’s Pittsburgh Steelers. [...] Britt is chairman of at least two Berkshire units that replaced their CEOs last year, and Abel has been building the company’s energy business through acquisitions.

iCORE Global Partners with CORT Business Services (National Real Estate Investor)

iCORE Global, a full-service commercial real estate provider, has formed a strategic partnership with CORT Business Services, a Berkshire Hathaway Company. iCORE has been providing commercial real estate services in over 267 major markets worldwide for the past 28 years. Now, iCORE will be able to provide clients with furniture solutions. [...] "With CORT currently servicing over 80 percent of the top Fortune 500 companies, there’s already a significant overlap in our customer base," iCORE Global CEO and Managing Director Samantha Mueting said in a statement.

Berkshire Hires CNA's Fortin for New Insurance Unit (WSJ)

Warren Buffett's Berkshire Hathaway Inc. said Wednesday it hired CNA Financial Corp. executive Dan Fortin to work for a new insurance unit the company launched in April. Mr. Fortin will serve as senior vice president for executive and professional lines, Berkshire said in a statement. He was previously senior vice president at CNA Specialty and served as interim CEO of CNA Europe in 2009. Mr. Fortin joins a growing group of underwriters moving to Berkshire after several top managers from American International Group Inc. (AIG) departed to set up the new unit in late April. The new unit, called Berkshire Hathaway Specialty Insurance, is based in Boston and headed by former AIG executive Peter Eastwood.

Berkshire Hathaway HomeServices gets social (Inman News)

The new Berkshire Hathaway HomeServices real estate franchise has rolled out Facebook, Twitter and Instagram accounts. The move comes in advance of broad adoption of the new brand by many Prudential Real Estate and Real Living brands beginning in the third and fourth quarters of this year.

Berkshire News Briefs - 5/30/13

Berkshire Hathaway’s MidAmerican expands Western footprint with $5.6 billion buy of NV Energy (Washington Post)

Berkshire Hathaway’s MidAmerican Energy utility said Wednesday that it will buy Nevada electric and natural gas company NV Energy Inc. for $5.6 billion as it expands its footprint in the energy sector. MidAmerican has been aggressively investing in renewable energy projects in recent years, and the companies expect that MidAmerican’s experience will help NV Energy develop renewable projects in Nevada, which has vast solar, wind and geothermal resources.

Warren Buffett’s Berkshire Hathaway buys The Roanoke (Va.) Times for undisclosed price (Washington Post)

Warren Buffett’s Berkshire Hathaway is adding The Roanoke (Va.) Times to its growing group of small and medium-sized newspapers. Berkshire said Thursday it will acquire The Times from Landmark Media Enterprises on Friday. It will be Berkshire’s 30th daily newspaper. Financial terms were not disclosed. Berkshire says The Roanoke Times has daily circulation of 76,000 and Sunday circulation of 90,000.

Newest director doesn't own Berkshire Hathaway shares (Omaha World Herald)

Meryl Witmer, an investment fund manager for Eagle Capital Partners in New York City, is the newest member of Berkshire's board of directors and, so far, the only one of its 13 members who doesn't own Berkshire shares. Shareholders elected Witmer on May 4 to the board of the Omaha-based conglomerate headed by Chairman and CEO Warren Buffett. She disclosed her non-ownership status in a filing this week with the U.S. Securities and Exchange Commission. The other 12 directors own Berkshire shares ranging from Buffett's $59 billion and Microsoft co-founder Bill Gates' $10.2 billion to the $350,000 worth of stock owned by Susan Decker, former president of Yahoo, who joined the board in 2007.

H.J. Heinz Company Announces Receipt of Chinese Regulatory Approval Required for the Acquisition of Heinz by Berkshire Hathaway and 3G Capital (MarketWatch)

H.J. Heinz Company today announced that it has received regulatory approval from the Chinese Ministry of Commerce for the acquisition of Heinz by an investment consortium comprised of Berkshire Hathaway and an investment fund affiliated with 3G Capital. The transaction remains subject to certain customary closing conditions, including receipt of certain remaining regulatory approvals, and is now expected to close in early- to mid-June. Heinz has received antitrust clearance in the United States, Brazil, India, South Korea, Japan, Israel, Mexico, South Africa and Ukraine, and other regulatory approvals in Russia, New Zealand and Ireland. The Company is waiting for antitrust clearance in the European Union and Russia.

Will 3G Capital make massive changes at Heinz? (Pittsburgh Post-Gazette)

Knowledge that the new owners -- a partnership between 3G Capital and Berkshire Hathaway -- will put every expense and every product under a microscope has the 1,200 Heinz employees in the Pittsburgh region polishing their resumes, networking with professional contacts and keeping their options open. "If this was only Berkshire Hathaway, I would say Heinz is going to be Heinz," said University of Pittsburgh business school professor Jay Sukits. "The wild card here, to me, is 3G." Berkshire Hathaway chairman Warren Buffett is known for buying and holding well-run companies such as Heinz. But 3G Capital could have a shorter-term view. The New York private equity firm has earned a reputation for aggressively and quickly cutting costs at companies it acquires [...]

Buffett's Berkshire Thinks This Bankruptcy Deal Stinks (Fool)

Residential Capital is moving rapidly toward exiting bankruptcy -- and Warren Buffett is not pleased. [...] This stake in ResCap's debt makes Buffett a major player in ResCap's bankruptcy proceedings. It gives Buffett a voice in agreeing to (or refusing) settlement negotiations to resolve creditor claims against ResCap, and it could result in an equity stake in the company if it exits bankruptcy -- and that's where things get complicated. [...] Buffett and Berkshire are right to push for full transparency in these bankruptcy proceedings, so that all interested players know what they're being asked to give up -- not just what Ally is offering to give them.

What Brooks Has Learned Working With Buffett (Fool Video)

Berkshire Hathaway subsidiary Brooks Sports is drawing quite a bit of attention from Buffett devotees these days. The running shoe maker has sprinted to 34% volume growth in both 2011 and 2012, with U.S. sales growth hitting the tape at 43% by the end of last year. Our roving reporter Rex Moore caught up with Brooks CEO Jim Weber at the recent Berkshire shareholder meeting in Omaha. In this segment of a multipart series, Jim says working under the Berkshire umbrella has taught him a lot about the power of the brand.

Berkshire Hathaway unit buys another Louisville realty firm (Louisville Business First)

HomeServices of Kentucky Inc., which owns Louisville-based Semonin Realtors, has agreed to purchase Louisville real estate firm Wakefield Reutlinger Realtors. The purchase is expected to become effective June 1. HomeServices of Kentucky is a wholly owned subsidiary of HomeServices of America Inc., a Berkshire Hathaway affiliate.

Berkshire’s Weschler Holds Almost $150 Million of DaVita (Bloomberg)

Warren Buffett’s Berkshire Hathaway Inc., the largest shareholder in DaVita (DVA) HealthCare Partners Inc., said deputy stock picker Ted Weschler has a personal holding in the dialysis provider valued at almost $150 million. Weschler has 1.19 million shares, or about 1.1 percent, of the Denver-based company, according to a regulatory filing yesterday. The holding was amassed before he joined Omaha, Nebraska-based Berkshire, according to the document. [...] Berkshire has a stake of 14 percent. The filing yesterday outlines an agreement by Weschler, 52, and Berkshire about the separation of their holdings.

Berkshire Hathaway Acquires 5% Stake In Starz (ValueWalk)

Warren Buffett’s Berkshire Hathaway Inc. recently submitted a 13G filing with the Securities and Exchange Commission (SEC), which showed that the conglomerate acquired 5.03 percent stake or 5,622,340 shares of Starz. Formerly known as Liberty Media Corp, Starz is a global media and entertainment company. Its offers premium subscription video programming services through its flagship pay TV networks, Starz and Encore to various channels video distributors such as cable operators, satellite television providers, and telecommunications companies. Starz and Encore have 21.6 and 35.1 subscribers respectively as of March 31, 2013. [...] The regulatory filing of Berkshire Hathaway Inc. revealed that its investment manager, Ted Weschler owns 285,834 shares of Starz.

Berkshire Sues NeighborCity.com in IP Dispute (Technorati)

Berkshire Hathaway has filed a lawsuit against NeighborCity.com, a real estate listing portal, despite the fact that the Warren Buffet’s company is a licensee of the latter. Berkshire is accusing the San Francisco-based company of copyright infringement when it allegedly reproduced, displayed, and distributed protected content such as photographs without any authorization from Berkshire’s listing services. The disagreement between the two companies shows how intellectual property (IP) rights can be used as a competitive tool in ecommerce and Internet-based lead generation and transactions.

Warren Buffett Lunch Auction To Kick Off June 2 (HuffPost)

Warren Buffett has already helped raise nearly $15 million over the years for a San Francisco homeless charity, and the group hopes someone will again be willing to pay more than $2 million for a private lunch with the Omaha, Neb., investor. [...] Bidding for the lunch on eBay will begin at $25,000 on the evening of June 2 and continue through June 7.