BRK cuts Tesco stake by £300M

[John Hjorth]

The telegraph:

 

BRK cuts Tesco stake by £300M.

[compoundinglife]

"Stock market filings show that Mr Buffett’s Berkshire Hathaway last week cut its holding in Tesco from 4.98pc to 3.98pc by offloading derivatives that represented 80m of the voting rights in the company."

 

Just looked at Edgar and did not see any filings related to this. Did he have Tesco related derivatives?  I thought he just had stock, so maybe he sold some calls on this position?

[compoundinglife]

Ok, so it sounds like he did a cash equity swap. Did not find the actual filing from LSE but found an post via Google that actually explains the data on the filings. He can still vote the shares AFAIK. Assuming this is related to the recent Marmon Group acquisitions in Europe.

[gfp]

This is the filing -

 

http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail.html?announcementId=11747865

[compoundinglife]

This is the filing -

 

http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail.html?announcementId=11747865

 

Thanks. I am not really familiar with swaps so I would appreciate if someone could correct me on this if I am wrong. But it basically sounds to me like he is:

 

1. Swapping the shares for cash while keeping voting rights for said shares. Presumably to free up some cash in european accounts for something else?

 

2. At expiration of the swap (jan 2015) he can undo the swap and get the shares back.

 

I assume he is paying the counterparty to carry the shares? Or is that settled at expiration?

 

 

[gfp]

You can think of it as him straight up selling some of his long position in the company.  His ownership (equivalent) went from 4.98% previously to 3.98% of Tesco. 

 

A total return swap is just a way to get long or short.

 

Here is the previous filing:  http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail.html?announcementId=11572149

 

And the most recent one again:  http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail.html?announcementId=11747865

[John Hjorth]

1. Swapping the shares for cash while keeping voting rights for said shares. Presumably to free up some cash in european accounts for something else?

I'm trying to stay tuned about what BRK and BRK subs are doing on this side of the Pond. I haven't seen anything material for long not already brought up and discussed on this board.

 

Munich Re position seems unchanged, there are no notifications of change of BRK position on Munich Re website.

[compoundinglife]

1. Swapping the shares for cash while keeping voting rights for said shares. Presumably to free up some cash in european accounts for something else?

I'm trying to stay tuned about what BRK and BRK subs are doing on this side of the Pond. I haven't seen anything material for long not already brought up and discussed on this board.

 

Munich Re position seems unchanged, there are no notifications of change of BRK position on Munich Re website.

 

But Marmon recently did some acquisition(s) in that area which is why I wondering if this was somehow a way to raise cash for that.

[compoundinglife]

Here is the info on it. 1.1B purchase in the UK for vending machine related biz http://www.bloomberg.com/news/2013-10-16/imi-sells-dispenser-arm-to-berkshire-hathaway-for-1-1-billion.html

[John Hjorth]

Here is the info on it. 1.1B purchase in the UK for vending machine related biz http://www.bloomberg.com/news/2013-10-16/imi-sells-dispenser-arm-to-berkshire-hathaway-for-1-1-billion.html

I checked the Marmon website for information about the aquisition, and found basically the same information. [ link ]. Marmon was privately held and run out of Chicago before BRK's acquisition, so there are no BRK filings about it. So basically a European bolt on aquisition on a US BRK sub, still not fully owned by BRK. So I guess the aquisition has been agreed with the Pritzker Family Trusts.

[compoundinglife]

Here is the info on it. 1.1B purchase in the UK for vending machine related biz http://www.bloomberg.com/news/2013-10-16/imi-sells-dispenser-arm-to-berkshire-hathaway-for-1-1-billion.html

I checked the Marmon website for information about the aquisition, and found basically the same information. [ link ]. Marmon was privately held and run out of Chicago before BRK's acquisition, so there are no BRK filings about it. So basically a European bolt on aquisition on a US BRK sub, still not fully owned by BRK. So I guess the aquisition has been agreed with the Pritzker Family Trusts.

 

BRK owns 90% so I would imagine they don't need approval of the trust.