Buf­fett's Berk­shire re­ports $4.5b stake in re­finer Phillips 66

The Pak Banker - - COMPANIES/BOSS -

War­ren Buf­fett's Berk­shire Hath­away Inc. 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.

Berk­shire held al­most 58 mil­lion shares af­ter pur­chases this week, or more than 10% of the to­tal out­stand­ing, ac­cord­ing to a reg­u­la­tory fil­ing is­sued on Fri­day by Buf­fett's Omaha, Ne­braska-based com­pany. Phillips 66 closed at $77.23 on Fri­day in New York.

Buf­fett and his deputy in­vest­ment man­agers, Todd Combs and Ted Weschler, are known for mak­ing large, con­trary bets on stocks. 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. Phillips 66 shares fell be­low $70 on Mon­day amid a broad sell-off be­fore re­bound­ing sharply later in the week.

Still, Berk­shire may have been ac­cu­mu­lat­ing the stake for some time, given the scale of the hold­ing, said Gallant. The fil­ing dis­closes the prices Berk­shire paid for only a frac­tion of its stake.

Ear­lier this month, Berk­shire didn't dis­close an in­vest­ment in Phillips 66 at the end of the sec­ond quar­ter. At the time, Buf­fett's firm also said it had omit­ted some data that was re­ported con­fi­den­tially to reg­u­la­tors. The US's Se­cu­ri­ties and Ex­change Com­mis­sion some­times al­lows com­pa­nies to with­hold in­for­ma­tion from the public to limit copy­cat in­vest­ing while a firm is build­ing or cut­ting a po­si­tion.

Buf­fett re­quested con­fi­den­tial treat­ment in 2011 fil­ings, as he spent more than $10 bil­lion amass­ing a stake in In­ter­na­tional Busi­ness Ma­chines Corp. (IBM). He did the same while build­ing a hold­ing in Exxon Mo­bil Corp. in 2013.

The most-re­cent fig­ure Berk­shire had given for a Phillips 66 in­vest­ment was a stake of 7.5 mil­lion shares at the end of March.

Buf­fett's com­pany for­merly held more stock in the re­finer. It used most of those shares to buy a busi­ness from Phillips 66 last year.

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