Berkshire Hathaway, an investment company associated with Billionaire Investor Warren Buffet, has increased its stake in Occidental Petroleum to over 25%.
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A regulatory filing on Wednesday seen by Investogist shows that Berkshire acquired over 2 million shares of Occidental in three batches; 638,301 units on 26th June, 1,239,180 units on 27 June, and 260,769 units on 28th June.
Berkshire paid an average of approximately US$57 per share, and now owns 25.1% of Occidental. The shares it now owns total 224.1 and is worth about $12.9 billion based on the closing price Wednesday.
Berkshire Hathaway began buying stock in Occidental last year, sparking speculation that it was going to take over the company, which it helped acquire rival Anadarko in 2019.
Buffett denied he had such plans at Berkshire’s annual shareholders’ meeting earlier this year.
“We don’t know where the price of oil will be, but we like Occidental’s position in the Permian,” Buffett told Berkshire Hathaway’s shareholders at the company’s annual meeting in early May.
“There’s speculation about us buying control, we’re not going to buy control,” Buffett added. “We wouldn’t know what to do with it.”
Year to date, the share price is relatively at the same position as it closed US$59.10 on June 29th, 2022. It is currently trading at US$58.16, having gained 1.22% today.
On August 8, Anadarko Petroleum shareholders approved a US$38 billion takeover bid by Occidental Petroleum, marking the completion of the acquisition process that had began in May of 2019.
Berkshire Hathaway funded the takeover of Anadarko with US$10 billion in the form of equity. It was as part of this deal that the investment firm received the stock purchase warrants that could see it acquire 20% or more in Occidental.
Berkshire is Occidental’s largest shareholders, and also own US$10 billion worth of its preferred stock, which carries an 8% dividend.
Occidental however, has started buying back the preferred shares, and following a redemption also captured in the regulatory filing on Wednesday, and several earlier ones this year, Berkshire’s stake in Occidental preferred stock is worth $9.2 billion.
Nnamdi Maduakor is a Writer, Investor and Entrepreneur
