Berkshire on hunt for more Heinz-like deals: Buffett

OMAHA, Neb., Mon Mar 4, 2013 — Berkshire Hathaway Inc. is on the hunt for more deals like its planned purchase of H.J. Heinz Co., Warren Buffett, the conglomerate’s CEO, said on Monday.

“If we get a chance to buy another Heinz, we will do that,” Buffett said on CNBC.

Berkshire likes the ketchup maker’s business, the price of the $23 billion deal, and its partner in the transaction, private equity firm 3G Capital, Buffett said in an extended interview.

“We hope to own Heinz 100 years from now,” Buffett said. “If you own great brands and you take care of them, they’re terrific assets,” he said.

Berkshire Hathaway, 3G Capital to buy Heinz for $23 billion cash

OMAHA, Neb., Thu Feb 14, 2013 — Warren Buffett’s Berkshire Hathaway Inc. and 3G Capital will buy H.J. Heinz Co. for $72.50 a share, or $23.2 billion in cash, Heinz said on Thursday.

Including debt assumption, Heinz valued the deal at $28 billion, which it called the largest in food industry history.

Heinz said the deal would be financed with cash from Berkshire and 3G, debt rollover and debt financing from J.P. Morgan and Wells Fargo.

The company did not elaborate on what portion of the cash would be contributed by Berkshire and what portion would come from 3G. CNBC reported that each side would put up $4.5 billion cash as part of the purchase.

“It’s my kind of deal and it’s my kind of partner,” Buffett told CNBC, adding that Berkshire and 3G would be equal equity partners.

Berkshire buys $1.2 billion in stock from single investor

OMAHA, Neb., Wed Dec 12, 2012 — Warren Buffett’s conglomerate Berkshire Hathaway Inc. bought back $1.2 billion in stock from the estate of an unnamed investor, the company said on Wednesday, one day after Buffett advocated for a higher estate tax when the wealthy die.

Berkshire also raised the threshold for future share buybacks to 120 percent of book value from 110 percent — the level it chose when it first approved a repurchase program in September 2011.

The most recent buyback was done at slightly more than 117 percent of Berkshire’s Sept. 30 book value.

Berkshire said it bought 9,200 Class A shares from “the estate of a long-time shareholder,” whom it did not name. Buffett’s assistant did not immediately respond to a request for comment on the shareholder’s identity.

According to Thomson Reuters data, only seven individuals or entities control enough stock to have been the seller, Buffett among them. It is possible the shareholder’s investment was not publicly known.

Berkshire, MetLife among 2012 top 10 picks, report says

NEW YORK ― Investors could reap gains of 15 percent to 20 percent next year by buying top-quality stocks such as MetLife, Comcast Corp. and Berkshire Hathaway, Barron’s said in its Dec 12 edition.

Companies with rising dividends like Procter & Gamble are also good bets for next year, the financial newspaper said in a report on its ten favorite stocks for 2012.

Four European companies made the top ten list, reflecting high dividend yields and markets depressed by the European debt crisis, Barron’s said. The paper said it likes the U.S.-listed shares of Vodafone Group, Royal Dutch Shell Daimler and Sanofi.

U.S. companies on the top ten list also included miner Freeport-McMoRan, which is profiting from developing countries’ demand for copper, and disk drive maker Seagate Technology, which should benefit from consolidation in the industry, Barron’s said.

The paper said Warren Buffett’s Berkshire is in its best shape ever, with a business mix that is churning out about $7,500 per share of profits each year. Buffett’s age (81) is the biggest downside, but he expects to run the company at least another five years, Barron’s said.

The paper acknowledged its 2011 top 10 lineup lagged the market, declining 6.9 percent on average compared with a 1.9 percent decline for the S&P 500. It attributed the subpar performance to declines in General Motors, JPMorgan Chase and United Continental.

The 2012 picks all have the potential for 15 percent to 20 percent total returns, it said.

Berkshire Hathaway to launch rare buyback program; shares spike

OMAHA, Neb. ― Warren Buffett’s conglomerate Berkshire Hathaway said it will launch a share buyback program, an unprecedented move from Buffett that comes after months of investor complaints that the stock is undervalued.

Some long-time investors have said Berkshire shares were lately at their cheapest in a generation, and even analysts who were cautious on the stock acknowledged it was attractively priced. Yet Buffett has held his ground, preferring deals that increase margins and provide a return.

In his letter to shareholders last February, Buffett bragged that “not a dime of cash has left Berkshire for dividends or share repurchases during the past 40 years.” But Berkshire said on Monday it was now willing to pay up to 10 percent more than book value for its stock.

“In the opinion of our Board and management, the underlying businesses of Berkshire are worth considerably more than this amount, though any such estimate is necessarily imprecise,” Berkshire said in a statement.One long-time Buffett investor said the “Oracle of Omaha” was effectively buying two things cheaply — Berkshire as an operating company for a broad set of industrial and consumer businesses, and Berkshire as a portfolio of financial and other stocks that have been heavily sold of late.

“There’s just so much leverage right now, this is close to as good a setup as you might ever see, to be a domestic play in a land of people hating domestic, with double leverage,” said Bill Smead, chief investment officer of Smead Capital Management in Seattle.

Berkshire Hathaway Class A shares rose 5.7 percent to $106,000 in midday trading, while the more actively traded Class B shares rose 6.3 percent to $70.56. Last week both classes fell to their lowest point since early 2010.

The A shares are so expensive because Berkshire has never split them, choosing instead to let them appreciate over time. The B shares, which hold lesser voting rights, were split to help finance the takeover of railroad Burlington Northern.

Warren Buffett picks another little-known successor

NEW YORK/BOSTON ― Berkshire Hathaway Inc expanded its succession plan for Warren Buffett on Monday, saying Virginia fund manager Ted Weschler will join the company early next year to help oversee its investments.

Berkshire said Weschler and Todd Combs, who joined the company last year, would manage its entire equity and debt portfolio after Buffett retires, possibly aided by a third manager. The third manager has not yet been named. For a time Combs and Weschler will run smaller portions of Berkshire’s stock holdings.

Berkshire’s equity portfolio totaled $52.36 billion as of June 30, according to an SEC filing.

Weschler, like Combs before him, has built up an eye-popping investment record, while keeping a low profile far from the canyons of Wall Street. The Virginia-based money manager delivered total gains of 1,236 percent over the last 11 years, according to investors.

A number of Buffett’s best-known biographers, as well as prominent fund managers including Mario Gabelli, all told Reuters Insider they were not familiar with Weschler or his work. The same was true when Combs was appointed last year.

Moments after one of the biggest personnel mysteries in finance was lifted and Weschler was appointed as one of a likely trio of heirs to Buffett’s stock-picking empire, Weschler kept to his usual routine. He was at his desk at Peninsula Capital Advisors — the hedge fund he founded in Charlottesville, Virginia in 1999 — dialing investors, his receptionist said.

On his voicemail, Weschler said he would call back soon.

Weschler’s interest in Warren Buffett, who is both chief executive officer of the ice-cream-to-insurance conglomerate and its money manager, has been growing for some time.

According to journalist Carol Loomis, a long-time friend of and ghost-writer for Buffett, Weschler paid millions of dollars to dine with the “Oracle of Omaha” twice in the last two years.

But unlike many who bid in the annual charity lunch with Buffett to benefit anti-poverty group Glide, Weschler insisted on anonymity — wanting his name to be kept out of the headlines and requesting a change of venue from the New York steakhouse where the lunch is usually held. Instead, Weschler, who bid $2.63 million, met Buffett on his home turf in Omaha.

Over the last years, pressure has mounted on Buffett to put a succession plan into place for the day the 81-year-old will no longer run the company. Buffett’s roles of investment manager will be split after he retires; the names on the CEO succession list are secret, however.

As Buffett has cast his eyes around the world for skillful money managers, Weschler has overseen a very concentrated portfolio with Direct TV, DaVita, which runs kidney dialysis centers, and Liberty Media, ranking among his biggest and most recent holdings.

In total, he held fewer than a dozen publicly traded U.S. stocks at the end of the second quarter, according to his most recent regulatory filing. He is not required to list stocks he may be shorting or betting against.

Weschler, 50, earned an undergraduate degree in economics from the Wharton School at the University of Pennsylvania, where Buffett began his own undergraduate career decades ago.

Before starting his stock-picking career in Virginia, Weschler worked at specialty chemicals and materials company W.R. Grace, where he at one time was assistant to the vice chairman.

The path for Weschler to join Berkshire was laid at this year’s lunch when Buffett pitched the idea of a move to Omaha, Buffett told Loomis. “I very much wanted him to do it, but I didn’t expect to get very far with the idea,” Buffett said.

“Ted will no doubt make a lot of money at Berkshire. But he was already making a lot of money with his fund — you can get an idea of that from the size of his (charity) bids — so money wasn’t a reason for him to come.”

In Charlottesville, a city one-quarter the size of Omaha, Weschler and his wife have supported a number of charities from helping sponsor a youth film festival to donating to one that builds structures for communities in need.

Stop coddling the super-rich, says billionaire Buffett

OMAHA, Neb. ― Billionaire Warren Buffett urged U.S. lawmakers to raise taxes on the country’s super-rich to help cut the budget deficit, saying such a move will not hurt investments.

“My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice,” The 80-year-old “Oracle of Omaha” wrote in an opinion article in The New York Times.

Buffett, one of the world’s richest men and chairman of conglomerate Berkshire Hathaway Inc , said his federal tax bill last year was $6,938,744.

“That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income – and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent,” he said.

Lawmakers engaged in a partisan battle over spending and taxes for more than three months before agreeing on August 2 to raise the $14.3 trillion U.S. debt ceiling, avoiding a U.S. default.”Americans are rapidly losing faith in the ability of Congress to deal with our country’s fiscal problems. Only action that is immediate, real and very substantial will prevent that doubt from morphing into hopelessness,” Buffett said.

Buffett said higher taxes for the rich will not discourage investment.

“I have worked with investors for 60 years and I have yet to see anyone – not even when capital gains rates were 39.9 percent in 1976-77 – shy away from a sensible investment because of the tax rate on the potential gain,” he said

“People invest to make money, and potential taxes have never scared them off.”

Transatlantic shares rise after Berkshire Hathaway bid

NEW YORK ― Shares in reinsurer Transatlantic Holdings rose more than 8 percent on Monday despite broad and deep market declines, after Warren Buffett’s Berkshire Hathaway made an unsolicited offer over the weekend to buy the company.

Transatlantic shares rose to $48.92 in morning trading, far outstripping a 1.1 percent decline in S&P insurance shares.

The company now has three suitors ― Berkshire, its agreed buyer Allied World and hostile candidate Validus. Transatlantic and Allied reached a deal in mid-June, which Validus attempted to trump in July with an offer it has now taken to shareholders.

At the share prices shortly after the markets opened Monday, the Allied World bid was a 7 percent discount to Transatlantic’s share price, while the Validus offer is a 4 percent discount and the Berkshire offer is a 6.2 percent premium.

All three deals value Transatlantic at less than book value. Transatlantic currently trades at 0.72 times its book value, compared to a sector average of 0.74, according to Thomson Reuters data.

Buffett’s Berkshire joins bidding group for Citi unit, newspaper reports

OMAHA ― Berkshire Hathaway Inc.  has joined the group bidding for Citigroup’s consumer lending unit OneMain, formerly known as CitiFinancial, the Wall Street Journal said, citing people familiar with the matter.

The Journal said Warren Buffett’s Berkshire had joined the consortium consisting of private-equity investment firm Centerbridge Capital Partners LLC and Leucadia National Corp, which is in exclusive talks with Citi for the possible acquisition of OneMain.

OneMain could fetch more than $8 billion, one of the people told the Journal. The consortium plans to write a large equity check and borrow significant sums to finance the purchase, the paper said. The Journal had earlier reported the consortium’s interest in OneMain.

Berkshire’s presence bolsters the consortium’s prospects to buy OneMain because Citi is focused on selling the business to well-capitalized owners that can keep the business stable, people familiar with the matter told WSJ.

OneMain’s book value is about $2 billion and has a large amount of loans on its balance sheet, the people told the Journal.

Citi and Berkshire Hathaway could not immediately be reached for comment by Reuters outside regular U.S. business hours.

Citi had recently restructured and rebranded OneMain.  OneMain offers personal loans to individuals through its network of 1,300 branches throughout the United States.

Citi is organized into two major segments ― Citicorp and Citi Holdings. Citi Holdings is where the bank houses assets and businesses it plans to shed.