Dig yourself a hole

30 Apr 2019 By John Foley Follow @johnsfoley

Berkshire Hathaway is putting up $10 billion to help Occidental fund its $38 billion bid for Anadarko. It’s a vote of confidence in Oxy’s unsolicited offer. As usual, though, the best deal will go to Warren Buffett himself, who can still win even if other shareholders lose.

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Warren Buffett’s Berkshire Hathaway plans to invest $10 billion in Occidental Petroleum to help finance the U.S. oil producer’s $38 billion bid for rival Anadarko Petroleum.

Occidental made its cash-and-stock offer for Anadarko on April 24, countering an agreed $33 billion deal with Chevron. The board of Anadarko is considering the new offer.

Berkshire Hathaway will get perpetual preferred shares that pay dividends of 8 percent a year. If dividends are not paid in any given year, they accumulate at 9 percent.

Buffett’s firm will also get a warrant allowing it to buy 80 million Occidental shares at $62.50 per share, which would equate to roughly a 10 percent stake. The company’s shares closed at $60.13 on April 29.

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