No. of Recommendations: 5
Who benefits? Maybe he's talking to Chevron. They got outbid by OXY for Andarako. There was always talk in the industry that Chevron would but the bigger OXY. If you're Chevron, did Buffett give you a 'green signal'.
I think you meant Chevron buying the smaller Occidental?
But yes, the statement surprised me too, both that Buffett doesn't want to buy out Occidental, and that he would reveal this, since he usually doesn't comment about his intentions with regard to stock market purchases. So your thinking makes a lot of sense, if his intent is to indicate to another purchaser that he is not going to pursue Occidental as a target.
I'm not sure why selling Chevron would be necessary but I guess 2 reasons would be that it removes a conflict of interest (not that there would be anything wrong with holding on to Chevron and hoping Chevron would acquire Occidental) but also, if you expect such an offer to occur, it is probably better to own the target and not the acquirer, since shareholders of the acquirer usually think too much was paid, and of course, shareholders of the target usually get a juicy takeover premium. If Chevron does pull the trigger, Berkshire could to accept Chevron shares, rather than cash, and win on both sides. Makes sense to me.
dtb
