Warren Buffett takes the floor and meets with Berkshire Hathaway shareholders before their annual meeting on May 3, 2024 in Omaha, Nebraska.
David A Grogan
Warren Buffett Berkshire Hathaway has picked up more shares from Occidental Petroleum in each of the last nine trading sessions, boosting his gargantuan stake in the Houston-based oil and gas producer to nearly 29%, according to regulatory filings.
The Omaha, Nebraska-based conglomerate bought Occidental shares every trading day from June 5 through Monday, totaling an additional 7.3 million shares at purchase prices just below or above $60, filings show.
The purchases increased Berkshire’s holdings to over 255 million shares, a 28.8% stake. Occidental is Berkshire’s sixth-largest stock holding, and the conglomerate has become Occidental’s largest institutional investor by far.
Berkshire also owns $10 billion of Occidental preferred stock and has warrants to purchase an additional 83.9 million common shares for $5 billion, or $59.62 apiece. The warrants were acquired under the company’s 2019 deal, which helped finance Occidental’s purchase of Anadarko Petroleum.
The stock closed Monday at $60.2, making Buffett’s warrants “in the money.” A full repayment of the preferred capital could increase Berkshire’s stake in Occidental to more than 40%.
Buffett has made it clear that he would not take full control of the oil company once known for being founded by legendary oilman Armand Hammer. There was speculation about a takeover after Berkshire received regulatory approval to acquire up to 50% of the shares.
“Read every word”
The Oracle of Omaha previously said he began buying Occidental after reading a transcript of the oil company’s earnings conference call.
“I read every word and said that’s exactly what I would do,” Buffett told CNBC.
Occidental CEO Vicki Hollub is “leading the company the right way,” he added.
Occidental also pays a dividend yield of 1.5%. The stock is trading almost flat this year after falling 5% in 2023.
The legendary investor said he took advantage of increased volatility in the market in early 2022 to purchase 14% of the energy company worth more than $7 billion in just two weeks.
“I just think it’s incredible. You couldn’t do that with Berkshire [buy] 14% of agricultural businesses in this country; 14% of multi-family homes; 14% of car dealerships or just everything, while 40% were already locked up somewhere else.”
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2024-06-18 13:13:02
www.cnbc.com
