Dig yourself a hole

30 April 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.

This content is for Subscribers only

To access full Breakingviews.com content you must be a subscriber. Please use the following link to request a trial.

Context News

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.

Email a friend

Please complete the form below.

Required fields *