(The following story by Steve Jordon appeared on the Omaha World-Herald website on January 20, 2010.)
OMAHA, Neb. — There’s only one mystery surrounding today’s special meeting of Berkshire Hathaway Inc. shareholders.
How many people will attend?
The meeting agenda has prompted no visible opposition, so shareholders likely will approve the only item of business: splitting Berkshire’s Class B shares 50-1, effective Thursday morning, in preparation for next month’s expected acquisition of Burlington Northern Santa Fe Corp.
The shareholders’ vote also will be an unofficial referendum on Chairman Warren Buffett’s plan to acquire the railroad company, which he says stands to prosper as the U.S. economy moves forward in coming decades.
It’s a long-term bet on the country’s economic future, he has said, and Berkshire shareholders likely will back him up.
For this meeting, shareholders did not receive attendance credentials in advance, as they do for the annual shareholders meeting that draws tens of thousands of shareholders to Omaha each May.
When the doors open at 8 a.m. to the Holland Performing Arts Center downtown, shareholders will gain admission by showing their IDs and, if their shares are held by a stockbroker or a bank, a statement proving stock ownership. They will meet in the 2,000-seat concert hall.
Berkshire officials said they don’t know how many people will attend, but the meeting will have few of the entertaining elements that draw the big crowd to the annual gathering: five hours of questions and answers with Buffett and Vice Chairman Charlie Munger; a convention hall full of Berkshire subsidiaries’ bargains; and the chance to rub shoulders with thousands of like-minded investors.
This meeting has no exhibits, probably a short Q&A session with Buffett and, most disappointing, no Munger.
Not to mention the 40-degree difference in temperature in Omaha between January and May, the aesthetic contrast between mounds of snow and springtime blossoms, budding leaves and green grass, and the contrast between warm weather and freezing rain.
Berkshire’s last special meeting was in 1998, at the Orpheum Theater, when about 500 shareholders approved Buffett’s plan to acquire General Reinsurance.
This time, he wants shareholders to split the shares so that when Berkshire issues $10.5 billion worth of stock as part of the $26 billion purchase price for the railroad, even the smallest Burlington Northern shareholders could become Berkshire shareholders. They also would receive $15.8 billion in cash.
Receiving stock for part of the purchase price would let those shareholders defer some income taxes.
The new, smaller-value shares would begin trading Thursday on the New York Stock Exchange, opening at one-fiftieth of Wednesday’s closing price. At Tuesday’s closing price of $3,337.95, that would be about $66 a share.
The split would not affect the price of Berkshire’s Class A shares, $100,090 at Tuesday’s close. After the Class B split, each Class A share could be converted into 1,500 Class B shares, instead of the 1-30 conversion ratio before the split.