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OMAHA, Neb. – Warren Buffett said on Saturday that Berkshire Hathaway does not plan to take full control of western oilan oil giant where he amassed a stake north of 20%.
“There’s speculation that we’re buying control, we’re not going to buy control,” the “Oracle of Omaha” said at Berkshire’s annual meeting of shareholders. “We wouldn’t know what to do with it.”
In August last year, Berkshire received regulatory approval to buy up to 50% of the capital. Since then, Buffett has steadily increased his bet, including this year, taking the conglomerate’s stake in the Houston-based energy producer to 23.5%. The moves had fueled speculation that the 92-year-old investor might acquire the whole business.
“We won’t be bidding for control of Occidental, but we like the stock we have,” Buffett said. “We may or may not own more in the future, but we certainly have warrants on what we got on the original deal on a very large amount of stock of about $59 a share, and the Warrants last a long time, and I’m glad we have them.”
Berkshire owns $10 billion of preferred stock in Occidental and has warrants to buy an additional 83.9 million common shares for $5 billion, or $59.62 each. The subscription warrants were obtained within the framework of the Offer 2019 who helped finance Acquisition of Anadarko by Occidental.
Shares of Occidental are down about 3% this year, after more than doubling in 2022. The stock was the best performing name in the S&P 500 last year.
– CNBC’s Sarah Min contributed reporting.