FRI, JAN 12, 2024
Settlement clears way for Berkshire to buy remaining 20% of PTC
Now that Warren Buffett's Berkshire Hathaway and the family of Cleveland Browns owner Jimmy Haslam have settled their court fight over valuing the 20% of Pilot Travel Centers that Berkshire hasn't already bought from the Haslams, they're presumably ready to do the deal.
Under the terms of their original agreement, Berkshire bought around 39% of the truck stop chain in 2017 and added another 41% early last year.
It also gives the Haslams a 60-day window at the beginning of each calendar year, starting this year, to require Berkshire to buy their remaining 20% at a price determined by PTC's earnings in the previous year.
A view inside the Pilot Co. company's headquarters in Knoxville, Tennessee, October 8, 2021. REUTERS/Harrison McClary
Dueling lawsuits had each side accusing the other of trying to manipulate PTC's earnings to affect the sale price of that 20%.
Terms of the legal settlement, which prompted the last-minute cancellation of a two-day trial scheduled to start last Monday in Delaware, were not announced.
But it seems likely it includes an agreement on the price Berkshire would pay, allowing the Haslams to trigger a sale before this year's window closes at end of next month.
Even if there is (or has been) a transaction, we may not find out about it right away.
Last year's sale giving Berkshire an 80% controlling stake in PTC was completed at the end of January but wasn't disclosed until Berkshire issued its 10-K annual filing (page K-24) around a month later.
Berkshire's Occidental Petroleum stake hasn't changed (lately)
An SEC filing by Berkshire Hathaway earlier this week led to some erroneous reports that the company had significantly increased its Occidental Petroleum stake at the end of last month.
The Schedule 13G (a required disclosure if someone or something owns more than 5% of a company's stock) showed Berkshire with 327,574,652.81 million shares, a 34.0% stake, as of December 31.
But that included 83,858,848.81 million shares that Berkshire would acquire if it chooses to exercise warrants it received in connection with a 2019 investment in OXY.
As the form notes, those warrants have not been exercised.
Occidental Petroleum's headquarters in Los Angeles, September 2013 |Reuters File Photo/Mario Anzuoni
Subtract 83,858,848.81 million from 327,574,652.81 million and you get the 243,715,804 shares Berkshire reported owning as of December 21 in its most recent OXY Form 4 disclosure, a stake of around 28%.
Unlike 13G, Form 4 does not include warrants in its total. It is used to report a material change in the number of shares owned by holders with more than 10% of a company's stock (and corporate insiders).
It must be filed within two business days, and it's how we've been tracking Berkshire's OXY purchases in between the quarterly 13F portfolio snapshots that it is also required to file with the SEC.
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BERKSHIRE'S TOP U.S. STOCK HOLDINGS - Jan. 12, 2024
Berkshire's top holdings of disclosed publicly-traded stocks in the U.S., Japan, and Hong Kong, by market value, based on today's closing prices.
Holdings are as of September 30, 2023 as reported in Berkshire Hathaway’s 13F filing on November 14, 2023, except for:
The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker.
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