Warren Buffett made late-2012 bid for NYSE Euronext: sources

OMAHA, Neb., Mon Jan 28, 2013 — Warren Buffett made a bid to acquire New York Stock Exchange operator NYSE Euronext last November, but his offer was less than one already on the table from IntercontinentalExchange Inc., two people familiar with the matter said.

The sources, speaking on condition of anonymity because they were not authorized to discuss the matter publicly, said Buffett’s conglomerate Berkshire Hathaway was the “Company A” bidder disclosed in a regulatory filing by ICE on Monday.

Buffett’s assistant could not immediately comment on the report. NYSE Euronext declined to comment. The news was first reported by CNBC’s David Faber.

ICE agreed to buy NYSE Euronext late last month for $8.2 billion following about two months of talks.

Before the deal closed, NYSE’s board of directors instructed the company’s bankers to pursue alternatives, according to the ICE filing with the U.S. Securities and Exchange Commission.

Buffett buys more shares in DaVita dialysis clinics firm

OMAHA, Neb., Mon Oct 1, 2012 – Warren Buffett has bought an additional 282,403 shares of DaVita Inc., the largest operator of dialysis clinics in the United States, according to a filing with the U.S. Securities and Exchange Commission on Monday.

Buffett, through Berkshire Hathaway Inc. is the largest shareholder in DaVita, owning now about 10 percent of the company’s stock.

Berkshire Hathaway bought the shares in multiple transactions at prices ranging from $100.42 to $103.76 between Sept. 26 and 28.

Berkshire Hathaway now owns 10.2 million shares in DaVita.

Buffett cuts $16 billion municipal credit bet in half

NEW YORK, Tue Aug 21, 2012, Berkshire Hathaway Inc. will terminate half of its bullish $16 billion bet on the credit quality of U.S. states, cities and towns, and has also cut its exposure to high yield corporate debt, it said in a regulatory filing this month.

The move comes as many investors including Berkshire Chairman, billionaire investor Warren Buffett, foresee an uptick in U.S. municipal bankruptcies.

Buffett said last month that the bankruptcies of three California cities in as many weeks was making traditionally objectionable Chapter 9 municipal bankruptcy filings more palatable to local governments in financial crises.

Berkshire sells protection against the default of states, towns and cities using credit default swaps. In these contracts the company would be required to reimburse its counterparty for debt losses in the event of a municipal bankruptcy.

Berkshire said it reached an agreement with a counterparty to terminate $8.25 billion of these positions. The portfolio includes insurance on over 500 state and municipal debt issuers and had a weighted average maturity of 8.8 years as of the end of June, the company said.

The Wall Street Journal earlier reported the termination.

A credit default swap index based on municipal debt showed a modest deterioration in perceptions of municipal credit quality in the second quarter, widening from 150 basis points at the end of March to 176 basis points at the end of the June, according to data provider Markit.

That means it would cost $176,000 per year to insure $10 million in debt for five years. The index has since retraced to 158 basis points, Markit data show.

Berkshire also reduced its exposure to CDS backed by high yield corporate debt in the first half of the year, to $3.26 billion, from $4.57 billion at the end of 2011, it said in the filing.

The company said that it has taken no new CDS positions in 2011 and 2012.

Warren Buffett says Berkshire buying stocks amid market dip

OMAHA, Neb., Mon May 7, 2012 – Berkshire Hathaway Inc. is adding to its shareholdings of two U.S. companies amid a market dip, billionaire investor Warren Buffett said on Monday.

Buffett, Berkshire’s controlling shareholder, also forecast record results this year for Berkshire’s largest non-insurance businesses, among them the railroad BNSF and the utility MidAmerican.

In an interview on cable television network CNBC from just outside his conglomerate’s home base here, he dismissed the dip in European shares after weekend elections in France and Greece.

“It’s going to be very, very difficult to resolve their problems,” he said of the euro zone countries, but he insisted they would do so eventually.

Buffett declined to identify the two portfolio stocks Berkshire was purchasing more of. He said Berkshire spent $60 million buying stocks last Friday would buy more today. It was not clear if the $60 billion was spent on just two stocks.

Over the weekend, Berkshire held its annual shareholder meeting in Omaha, a festival-like event that draws nearly 40,000 people for an hours-long question-and-answer session with Buffett and Berkshire Vice Chairman Charlie Munger.

It was during that session that Buffett revealed he had very nearly made an acquisition of more than $22 billion recently, which would have been one of his biggest ever.

The 81-year-old Buffett, recently diagnosed with early-stage prostate cancer, spent much of the day assuring shareholders he was in good health.

While Buffett has his acolytes, not everyone was impressed with his performance. Australian hedge fund manager John Hempton, in a post on his blog on Saturday, said the day was full of the usual questions on politics, economics and the like.

“I got all this — and for the most part I got the usual homily answers. (The same questions were asked last year and the year before and the year before that. Answers can be got from meeting notes),” Hempton wrote.

During the CNBC interview, Buffett reiterated his support for Wal-Mart Stores Inc., saying a scandal over bribe payments in Mexico did not change his opinion of the stock. He is Wal-Mart’s fifth-largest shareholder.

Buffett builds $10.7 billion stake in IBM, tied for largest share

OMAHA, Neb. ― Warren Buffett said his Berkshire Hathaway Inc. has accumulated a 5.5 percent stake in IBM, the billionaire investor’s biggest bet in the technology field he has historically shunned.

Buffett, in a CNBC interview on Monday, said he had bought about 64 million shares of IBM at a cost of $10.7 billion. Berkshire started buying the shares in March, with a goal of building a $10 billion position, he said.

Buffett said IBM did not know that he was building a stake and that the company was finding out about his investment for the first time as he disclosed it on CNBC.

IBM spokesmen were not immediately available to comment.

The legendary investor said he has always looked at IBM’s annual report — his preferred method of identifying companies to invest in — but this year “I read it through a different lens.”

Buffett said follow-on conversations with various technology executives throughout the Berkshire conglomerate convinced him to start building the stake.

Berkshire is due to make a quarterly report of its equity holdings on Monday night.

According to Thomson Reuters data, a 5.5 percent position in IBM would tie Buffett with State Street Global Advisors for the largest stake in the company.

IBM shares rose nearly 1 percent in premarket trading. Since early March, when Buffett started building his position, IBM shares are up about 17 percent, against a 3 percent decline for the S&P 500.

One place where Buffett is not investing is European banks.

Buffett, who put $5 billion into Bank of America Corp earlier this year, comes up whenever there is talk of a large European bank needing to raise capital, particularly in the current environment of writedowns on sovereign debt.

But he told CNBC that he would need to understand European banks better before investing in them, and that he has not yet seen an investment opportunity there in which he wants to take part.

The “Oracle of Omaha” and Berkshire Hathaway chief executive said he expects Europe’s economy to show improvement 10 years from now, but getting there will be difficult.

Warren Buffett backs Bank of America, buying more stocks

OMAHA, Neb. ― Warren Buffett said on Friday he is still eager to buy companies and stocks, even as his conglomerate Berkshire Hathaway launches its first-ever share buyback program.

Buffett, in a CNBC interview, said the repurchases will not stop the company from making acquisitions or spending on infrastructure for its portfolio of companies.

The “Oracle of Omaha” also reiterated his support for Bank of America Corp. even as he acknowledged it will take the bank time to solve its problems.

Buffett said Berkshire bought a net $4 billion of common stock on the market in the third quarter as sharp declines presented opportunities to invest cheaply.

But it is the investment in its own shares that stunned the market. Berkshire announced the program Monday, saying it would pay up to 10 percent above book value for stock. Investors said the program meant Berkshire was probably undervalued by 30 percent or more.

Buffett said the paperwork to start the buybacks was completed on Thursday.

Berkshire Class A shares were down 0.9 percent at $108,202 in afternoon trade on Friday, in line with broader market declines, though the stock is still up sharply from the pre-buyback levels of late last week.

While Berkshire has said it could spend heavily on shares, Buffett said on Friday the company would still make acquisitions and would end up spending $7 billion this year on plant and equipment for its portfolio of companies.

As he has all year long, he said such investments were a bet on the economic strength of the United States. “It’s very, very unlikely we’ll go back into a recession,” Buffett said.

That confidence was part of his reasoning for the deal with Bank of America, which gave him a lucrative dividend and a pile of unusually long-lasting warrants as well.

Bank of America is “a fabulous business, but it’s got a lot of problems from the past,” he said, acknowledging that CEO Brian Moynihan will need years to fix them.

Bank of America is cutting 30,000 jobs in the first phase of an expense reduction program called “New BAC,” a play on the company’s ticker symbol. The bank is also shedding assets to raise capital to meet new industry standards that begin to take effect in 2013.

Buffett was on the NYSE floor to help mark the 50th anniversary of his portfolio company, Business Wire, yet he is also in New York to host a fundraiser for President Barack Obama, who has adopted his plan for the rich to pay a higher rate of tax than they do now.

Buffett — who said the White House had asked for permission to put his name on the plan — estimated that about 50,000 people nationwide would pay more taxes under the proposal.

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.

Buffett rally ends as BofA falls under pre-deal levels

NEW YORK ― Investors who followed Warren Buffett’s lead on Bank of America Corp. are back to where they started.

Shares of the financial giant, which spiked as much as 26 percent after the billionaire investor agreed to invest $5 billion in the company, are now trading below their pre-announcement level.

The stock fell 5.9 percent to $6.82 on Tuesday, under the $6.99 level it closed at on August 24, the day before the deal was announced.

Bank of America shares have followed the broader market, which in recent sessions has been beset by growing fears the economy will slip back into recession. Persisting concerns about the euro zone debt crisis have also kept investors uneasy, with financial stocks among the most susceptible to weakness.

The S&P 500 .SPX fell 2.8 percent on Thursday.

Despite the drop in the shares, Buffett, the chief executive of Berkshire Hathaway, will easily profit from his investment. Under the terms of the deal, he has warrants to buy 700 million shares of common stock, priced at just over $7.14 per share with an unusually long 10-year exercise period.

In addition, Bank of America will also sell Berkshire 50,000 shares of cumulative perpetual preferred stock with a 6 percent annual dividend. The Dow component can buy back the investment at any time by paying Buffett a 5 percent premium.

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.”