Berkshire Hathaway takes $4.48B stake in refiner Phillips 66

31 Aug 2015 | Author: | No comments yet »

Berkshire Hathaway Builds Stake in Refiner Phillips 66.

In late 2013, the Omaha, Neb., company agreed to trade about $1.4 billion of its Phillips 66 stock for one of the refiner’s businesses that makes additives to help crude oil flow through pipelines. Warren Buffett’s Berkshire Hathaway disclosed a $4.5 billion stake in Phillips 66, the Houston-based oil refiner, as the billionaire investor’s company increases its bet on the energy industry.On Friday, the Omaha, based holding company revealed its stake of 57.98 million shares or closely 10.8 percent of the stock in a filing with the Securities and Exchange Commission. The latest wager comes amid a slump in crude prices, driven by concerns that a supply glut will persist. “Berkshire’s made a clear statement about how they view the oil business,” said Cliff Gallant, an analyst at Nomura Holdings Inc. “They seem to be taking the long view that demand for fuel is going to come back.” Concern over China’s growth roiled global financial markets earlier this week and created a buying opportunity for Berkshire.

In an Aug. 14 S.E.C. filing detailing its United States stock holdings, Berkshire did not mention Phillips 66 — after previously reporting a stake of 7.5 million shares as of March 31 — but said it had disclosed some information confidentially to the regulator. However in February 2014, the holding company shed almost two-thirds of its share as Berkshire traded shares worth $1.35 billion for a chemicals business which it folded into its Lubrizol unit. Buffett can quietly buy a large amount of stock without worrying about investors piggybacking on what they may think to be the famed investor’s stamp of approval.

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