Warren Buffett’s Berkshire Hathaway To Buy 50% of Occidental Petroleum


Friday’s news fueled speculation that Buffett might be willing to purchase the whole firm.

“He will likely continue to buy as much as he can get below $70 or $75. If you own 30% or 40% and would like to buy it out at $95 or $100, you saved a lot of money,” said Cole Smead, president of Smead Capital Management and a Berkshire shareholder. “This stock trades like a casino. The market is giving him all the stock he wants.”

David Kass, a finance professor at the University of Maryland’s Robert H. Smith School of Business, said an acquisition down the road is likely.

“I think it is likely that Buffett will buy the whole thing eventually. The 50% limit may have been set to receive FERC approval for a non-controlling stake,” Kass said. “He clearly plans to purchase additional shares. So far, his maximum purchase price has been $60.37 per share.”

Some speculated that Berkshire and Occidental had been in communication about the potential move to increase the stake to up to 50%.

“He has always said he would only do friendly deals, so that he may have agreed with the OXY board on that limit,” said Bill Stone, CIO of The Glenview Trust Company and a Berkshire shareholder.