Western Railroad Discussion > Buffett Buys ALL of BNSF

http://www.businessinsider.com/berkshire-hathaway-buying-burlington-northern-for-100-per-share-2009-11

On CNBC . . sounded like he said 34 billion . . ? He just said 34 billion again . . .

http://www.businesswire.com/portal/site/google/?ndmViewId=news_view&newsId=20091103005847&newsLang=en



Edited 2 time(s). Last edit at 11/03/09 05:09 by Yarddogh.

NEW YORK (MarketWatch) -- Warren Buffett's Berkshire Hathaway on Tuesday said it is paying $100 a share to acquire railroad firm Burlington Northern Santa Fe. It will also take on $10 billion of Burlington Northern debt, valuing the total deal at $44 billion. Berkshire said the deal is its biggest acquisition ever. "Our country's future prosperity depends on its having an efficient and well-maintained rail system," Warren Buffett said in a press release. "Conversely, America must grow and prosper for railroads to do well. He added, "Most important of all, however, it's an all-in wager on the economic future of the United States. I love these bets

Suppose its...

Buffett's
New
Santa
Fe



Edited 1 time(s). Last edit at 11/03/09 04:55 by Pinlifter.

He must like what he has seen so far. Paid a hefty premium for the company. It will be interesting to see how Berkshire shares react.

Wow. I am glad that he has a positive vision of the economic future. Now, if he can get this jobless recovery to generate jobs.....

look4trains Wrote:
-------------------------------------------------------
> He must like what he has seen so far. Paid a hefty
> premium for the company. It will be interesting to
> see how Berkshire shares react.


My quote system is a little goofy, but it appears that BRK is being bid higher. "Baby Berkshire," the Class B shares that represent 1/30th of the Class A shares, are indicated up. New York close yesterday was $3,265 a share. Pre-market indications are $3,285 bid and $3,349 ask (prices you would get for selling or pay for buying, respectively).

BobE

BobE Wrote:
-------------------------------------------------------
> look4trains Wrote:
> --------------------------------------------------
> -----
> > He must like what he has seen so far. Paid a
> hefty
> > premium for the company. It will be interesting
> to
> > see how Berkshire shares react.
>
>
> My quote system is a little goofy, but it appears
> that BRK is being bid higher. "Baby Berkshire,"
> the Class B shares that represent 1/30th of the
> Class A shares, are indicated up. New York close
> yesterday was $3,265 a share. Pre-market
> indications are $3,285 bid and $3,349 ask (prices
> you would get for selling or pay for buying,
> respectively).
>
> BobE


Bob, the B shares are being split 50 to 1, which may account for the liquidity needed in the partly stock deal. If the A shares aren't being split, that could account for some of the pattern variation between the A and the B

Here's the NY Times's dealbook take:

http://dealbook.blogs.nytimes.com/2009/11/03/berkshire-to-buy-rest-of-burlington-northern-for-44-billion/?hp



Paul

Berkshire is going to do a 50-1 split of its B shares so that they can issue the stock to smaller (read non-institutional) investors. I expect you will see a lot of up and down movement on the B shares once the BNSF shareholders get the stock. Based on yesterday's closing price of $3265 for the B shares they will be around $65 a share after the 50-1 split. You would need to own nearly 1000 shares of BNSF in order to get one of Berkshire's $98,750 A shares! (And I thought I paid a lot when I bought mine in the late 80's for $7000!)

So now both western Class 1's are based in Omaha.

Tim



Edited 1 time(s). Last edit at 11/03/09 05:49 by njmidland.

Now THERE is a railfan! --- --- - --- JLH

Buffet was interviewed on CNBC this morning. He says he has confidence in the US economy
and that rails are going to be a solid part of the upcoming rebound.

He is betting the proverbial farm on BNSF.

Now is a chance to lobby for the return of the Warbonnet at least to some degree.

Does one *have* to sell BNSF stock that they own? What if I don't want to sell my shares??

Ted

Hmm, isn't Buffett often called the "Oracle of Omaha". I believe that UP is HQed there also.

As my old friend Artie Johnson used to say, verry interresting.

Bruce DeMaeyer

warbonnet, f units for directors specials, steam program, coke from the drinking fountains and free ice cream are all planned

ArgyleEagle Wrote:
-------------------------------------------------------
> Buffet was interviewed on CNBC this morning. He
> says he has confidence in the US economy
> and that rails are going to be a solid part of the
> upcoming rebound.
>
> He is betting the proverbial farm on BNSF.


Definitely a big bet, but not betting the farm. BRK will have $20bn in cash after the deal settles.

MidAmerican Energy, another Berkshire property, has had difficult relations with its several operating unions over the years, as I recall.

The IBEW, in particular, has had troubles over the company's take it or leave it stance, as they've describe it. David Sokol, one of the leading candidates to replace Mr Buffett, heads MidAmerican.

ACR_Ted Wrote:
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> Does one *have* to sell BNSF stock that they own?
> What if I don't want to sell my shares??
>
> Ted


In most cases, once the deal closes, shareholders will be directed to tender their shares to an agent, who will pay you at the set price.

If you choose not to submit, your shares are canceled, and a settlement amount is escrowed to settle up when you or your heirs decide to tender the now otherwise worthless shares. Your broker may not like this, since they won't be paid by the settlement agent.

In the old days when actual certificates existed, you could get your certs back with a canceled punch on them. Many old framed share certs have this mark.

Any possibility that BNSF parts will be auctioned off by Buffett with the price of the parts being > the whole?

JPB - As always, "Get your pictures now!". The only thing constant is change... JLH

ACR_Ted Wrote:
-------------------------------------------------------
> Does one *have* to sell BNSF stock that they own?
> What if I don't want to sell my shares??
>
> Ted

The only way to continue to be a BNSF stockholder is to ask for Berkshire stock. This way you will still be a shareholder in not just BNSF but all of Berkshire's companies - for a list visit http://www.berkshirehathaway.com/subs/sublinks.html From Borsheims Jewelry to See's Candy to GEICO Insurance it is quite the company. No one can predict the future but Berkshire stockholders have consistently exceeded the S&P 500 over the last 40 years.

Tim

JPB Wrote:
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> Any possibility that BNSF parts will be auctioned
> off by Buffett with the price of the parts being >
> the whole?

Highly unlikely - Buffet's philosophy is to buy and hold "forever". In the cases where he has sold, he sells the business as a whole. He also let's the management team operate without interfering so if BNSF wants to sell off any lines they deem unnecessary Buffet will not stop them - so if Colorado were to want their part of the Santa Fe passenger main to connect with the portion purchased by New Mexico he would not stand in the way.

Tim