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- Manlobbi
Halls of Shrewd'm / US Policy❤
No. of Recommendations: 1
From the 10Q.
As of March 31, 2023, our investment in Occidental preferred stock had an aggregate liquidation value of approximately $9.5 billion. During March of 2023, Occidental issued mandatory redemption notifications at a price of 110% of the liquidation value, plus accrued and unpaid dividends for $474 million of preferred stock liquidation value due to excess distributions by Occidental to its common stockholders, as defined under the agreement.
In the Q&A, Buffett stated that they were not interested in controlling OXY. There was a lot of speculation because of the relentless purchases of OXY stock. This combined with the sales of CVX stock in Q1 would have further fueled speculation that he was preparing to make an offer.
No. of Recommendations: 1
Why does Warren say they have no interest in buying OXY after accumulating a 20+% in the equity and a large pfd investment which is equal in size to the common stock investment? Who is he talking to? 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'. Making sense to me. If CVX buys OXY, Warren owns a much bigger entity in oil/gas. Was selling Chevron a 1st step in this process? Really thinking on this. And he's not going to sell OXY. Warren is too big in it. Would crush the stock.
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
No. of Recommendations: 0
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?
OXY is bigger after acquiring Andarko, not smaller, therefore "buying the bigger OXY" would appear to be correct.
Aussi
No. of Recommendations: 2
I think you meant Chevron buying the smaller Occidental?
==========
OXY is bigger after acquiring Andarko, not smaller, therefore "buying the bigger OXY" would appear to be correct.
How so?
Occidental acquired Anadarko 4 years ago, for $57b. Occidental is now worth $55b. (Maybe not the greatest deal, but at least it allowed Berkshire to become involved.) Including Anadarko, it produced 1.2m barrels of oil equivalent (BOE) per day last year.
Chevron is worth $304b, and produced about 3.0 million BOE per day in 2022.
dtb
