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» RAILforum » Passenger Trains » Amtrak » BNSF: A Berkshire Hathaway Company

   
Author Topic: BNSF: A Berkshire Hathaway Company
PullmanCo
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Warren Buffett and Berkshire Hathaway has tendered, according to several news reports, a $100 a share offer for the 77.4% of BNSF he doesn't already own.
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Railroad Bob
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Yes-- my modest stock holding in BNI is up about 20 bucks a share today. Finally a bump in my portfolio..in the right direction. As to Buffett taking this action, he researches his moves pretty thoroughly. Not that we'll see much difference on the surface of the BNSF daily operations, however maybe we'll see him using one of the BNSF biz trains to ride over and inspect his new Road. I know I would be in that beautiful train ASAP! Guess getting "cab rides" won't be a problem either for Mr. Buffett, should he ever desire to go over the road in one of the big air-conditioned diesels...
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Gilbert B Norman
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New York Times:

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

Wall Street Journal (subscription site):

http://online.wsj.com/article/SB10001424052748703740004574513191915147218.html

Time to go turn on CNBC

usual disclaimer

Posts: 9388 | From: Clarendon Hills, IL USA (BNSF Chicago Sub MP 18.71) | Registered: Apr 2002  |  IP: Logged | Report this post to a Moderator
zephyr
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Several law firms have issued news releases announcing they are "...investigating possible breaches of fiduciary duty." That's law-speak for Berkshire may not be paying enough for BNSF.

The legal issue is that the BNSF Board may not have "adequately shopped itself around" for a better deal, thus unlawfully harming Burlington shareholders.

Which raises the question of who else may be interested in buying a railroad? Bill Gates dabbled in the Wisconsin Central. Philip Anschutz bought a couple of roads (Rio Grande and SP). Rock star Neil Young sunk some bucks into Lionel. And there's always New Mexico.

But for me, the money must take a back seat to the alliteration angle of "Buffett's Berkshire buys Burlington for billions." Try to say that five times fast without spitting.

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Gilbert B Norman
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This acquisition hardly represents a "dot com one day pop". On April 23 2008 BNI closed at 97.43"
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zephyr
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Interview with BNSF CEO. And Buffett's take.

Buffett's Lionel collection is briefly mentioned in the BNSF CEO Matthew Rose interview. Do you all see what playing with toy trains can lead to?

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PullmanCo
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Buffett has the wherewithal just to simply offer the tender and then to start buying everything else as it hits the market. The Board could well be redundant.

What's the law on going after Directors personally, vice the corporation?

--------------------
The City of Saint Louis (UP, 1967) is still my standard for passenger operations

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zephyr
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Here's an overview of directors and officers liability and related insurance.

I found all the news releases from law firms "looking into breaches of fiduciary duty" a sad commentary on today's world. It's like a lottery for lawyers. Leave it to them to try to get into everyone's breaches.

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Gilbert B Norman
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While the Wall Street Journal's site is subscription, sometimes Feature material is available as free content. If such be the case, enjoy. Otherwise, perhaps there could be a "thanks boss' moment come Monday:

http://online.wsj.com/article/SB10001424052748704795604574519520823031980.html

Also, it appears that Warren's little stop at the hobby shop to pick up a Lionel (OK 32000 miles of one - and at 1:1 scale) set aroused interest in the railfanning hobby to such extent that it is newsworthy for general circulation publications such as The New York Times. This article appears on Page 2 of Today's Week in Review section:

http://www.nytimes.com/2009/11/08/weekinreview/08barry.html

Posts: 9388 | From: Clarendon Hills, IL USA (BNSF Chicago Sub MP 18.71) | Registered: Apr 2002  |  IP: Logged | Report this post to a Moderator
Gilbert B Norman
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Wall Street Journal today reports that Berkshire Hathaway will divest its interests in both Norfolk Southern and Union Pacific. Why this is being done is not made clear by the article. It could be to eliminate any possible regulatory issues or it could be to minimize overweighting the portfolio with railroad holdings.

While Warren usually is, he is not always 100% right (USAir, GenRe; that he avoided technology holdings is open to debate).

http://online.wsj.com/article/SB125780284370839503.html

(BTW "gottaluv" the photo caption in the article)

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PullmanCo
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That makes sense. He bought enough of each to play, and to get his people to really understand the financials and the business models.

Then he picked what he perceived the best was.

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sfthunderchief
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November 12, 2009: Is Warren Buffett in Kansas City this morning at Union Station terminal?

Eight units of the BNSF business train are sitting on the north track with BNSF 32 on end. The lounge section of that car could be seen laid out for an extremely fancy breakfast, and many of the cars still had the shades drawn apparently for those still sleeping at 7:30 am.

The BNSF business train includes Raton Pass, Tehachapi Pass,and several others. Could this be a tour of the empire by the new boss?

The Chief and River Runner departed on time.

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Gilbert B Norman
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quote:
Originally posted by sfthunderchief:
Could this be a tour of the empire by the new boss?

No; but it could well be a tour by the new owner.

Warren has clearly established that when he buys a company, he is also buying their management. Unlike other raiders, he stays out of the day to day management. He is not from the "activist" ilk of Carl Ichan, Cerberus, "Gordon Gekko", or even the London outfit named TCF Fund that holds a large position in CSX.

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sfthunderchief
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quote:
Originally posted by Gilbert B Norman:
quote:
Originally posted by sfthunderchief:
Could this be a tour of the empire by the new boss?

No; but it could well be a tour by the new owner.

Warren has clearly established that when he buys a company, he is also buying their management. Unlike other raiders, he stays out of the day to day management. He is not from the "activist" ilk of Carl Ichan, Cerberus, "Gordon Gekko", or even the London outfit named TCF Fund that holds a large position in CSX.

Mr. Norman: I think he is in Kansas City, in the station. He is in the company of Mike Haverty-KCS and a large group of suits. I took some shots on my camera phone, but the light contrasts in the station are so dim and iffy hat the pictures are poor. But the suit with the white receding hairline, about 5'-7", looked a lot like Buffett from a distance of 50 feet.

BNSF has a large presence here, the large division corporate office, the railroad training center at Johnson County Community College, two yards, ect.

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PullmanCo
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There's also the small matter that the business cars live at the Topeka Shops, and the business commissary is still the old BN business car coach yard at Murray, Northtown.

Good morning Mr Harriman, errr, Buffett.

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