(The following story by Joe Ruff appeared on the Omaha World-Herald website on December 12, 2009.)
OMAHA, Neb. — Shareholders of Burlington Northern Santa Fe Corp. will meet Feb. 11 in Fort Worth, Texas, to vote on a purchase offer by Berkshire Hathaway Inc., Warren Buffett’s Omaha-based investment company.
The deal requires the approval of BNSF stockholders. It is expected to pass because Berkshire’s offering price in November was about 30 percent more than the value of the stock at the time.
The purchase doesn’t require approval of Berkshire stockholders, although the company will hold a special shareholders meeting Jan. 20 to approve Buffett’s plan to split each Berkshire Class B share into 50 new shares at one-fiftieth of the going price. That also is expected to pass.
Berkshire plans to use stock for 40 percent and cash for 60 percent of the $26 billion it needs to buy all the BNSF shares it doesn’t already own. Burlington shareholders would have to declare the cash portion on their income taxes but not the stock portion.
Without the stock split, Buffett has said, people holding smaller amounts of Burlington stock would not be able to make full use of the deal’s tax advantage.
In purchasing BNSF, Berkshire also would assume $10 billion of its debt.