Berkshire Hathaway sold the remaining holdings of 11 million shares of Constellation Energy Group Inc. on June 1, which ended Berkshire’s process of selling CEG over the past 5 months.
Berkshire received almost 20 million shares of Constellation Energy at the termination of the merger agreement. In Sept. 2008, Berkshire’s MidAmerican subsidiary entered into a merger agreement with Constellation. Berkshire infused $1 billion to Constellation for 10000 shares of Series A preferred stock. This merger agreement was terminated by constellation in Dec. 2008. As the result of the termination the 10000 shares of Series A preferred stock was converted into almost 20 million shares of CEG common stock. Berkshire has since selling those shares. The selling prices were between $23 and $27.5 a share. Those shares are sold for about a total $535 million.
While $535 million is only about half of the $1 billion, Berkshire is certainly not in the position of losing money in this deal. Upon termination of the merger agreement, Berkshire was paid a termination fee of $175 million, a payment of approximately $17 million of accrued dividends on the Series A Preferred Stock and a cash payout of approximately $418 million. Considering all these, Berkshire gained about $170 million from the broken deal with Constellation Energy.Â
Berkshire’s MidAmerican subsidiary is run by David Sokol, who is said to be the most likely successor of Warren Buffett. Sokol said in an interview with Bloomberg Television he hasn't discussed succession with Buffett.
"Never a word," Sokol said. "Unfortunately my name comes up because people try to come up with names."
Tony Nicely, the head of Berkshire 's Geico Corp. car insurance business, and Ajit Jain, who runs a unit that sells reinsurance, are also on media lists of potential successors.
This is the details of the transactions:
Berkshire received almost 20 million shares of Constellation Energy at the termination of the merger agreement. In Sept. 2008, Berkshire’s MidAmerican subsidiary entered into a merger agreement with Constellation. Berkshire infused $1 billion to Constellation for 10000 shares of Series A preferred stock. This merger agreement was terminated by constellation in Dec. 2008. As the result of the termination the 10000 shares of Series A preferred stock was converted into almost 20 million shares of CEG common stock. Berkshire has since selling those shares. The selling prices were between $23 and $27.5 a share. Those shares are sold for about a total $535 million.
While $535 million is only about half of the $1 billion, Berkshire is certainly not in the position of losing money in this deal. Upon termination of the merger agreement, Berkshire was paid a termination fee of $175 million, a payment of approximately $17 million of accrued dividends on the Series A Preferred Stock and a cash payout of approximately $418 million. Considering all these, Berkshire gained about $170 million from the broken deal with Constellation Energy.Â
Berkshire’s MidAmerican subsidiary is run by David Sokol, who is said to be the most likely successor of Warren Buffett. Sokol said in an interview with Bloomberg Television he hasn't discussed succession with Buffett.
"Never a word," Sokol said. "Unfortunately my name comes up because people try to come up with names."
Tony Nicely, the head of Berkshire 's Geico Corp. car insurance business, and Ajit Jain, who runs a unit that sells reinsurance, are also on media lists of potential successors.
This is the details of the transactions:
| Date | # of Shares | Share Price ($) | Value ($) |
|---|---|---|---|
| 1/12/09 | 300000 | 27.11 | 8133000 |
| 1/13/09 | 231500 | 27.32 | 6324580 |
| 1/14/09 | 238200 | 26.89 | 6405198 |
| 1/15/09 | 270900 | 27.13 | 7349517 |
| 1/16/09 | 325000 | 27.55 | 8953750 |
| 1/20/09 | 243700 | 27.03 | 6587211 |
| 1/21/09 | 262500 | 26.82 | 7040250 |
| 1/22/09 | 460400 | 27.06 | 12458424 |
| 1/23/09 | 91300 | 26.61 | 2429493 |
| 1/26/09 | 304000 | 26.99 | 8204960 |
| 1/27/09 | 124500 | 26.83 | 3340335 |
| 1/28/09 | 250000 | 27.08 | 6770000 |
| 1/29/09 | 315200 | 27.29 | 8601808 |
| 1/30/09 | 63276 | 26.67 | 1687570.92 |
| 1/6/09 | 48300 | 26.61 | 1285263 |
| 1/8/09 | 93500 | 26.55 | 2482425 |
| 1/9/09 | 200000 | 26.66 | 5332000 |
| 2/2/09 | 57438 | 26.62 | 1528999.56 |
| 2/3/09 | 28800 | 26.58 | 765504 |
| 2/4/09 | 30798 | 26.56 | 817994.88 |
| 2/5/09 | 479600 | 26.99 | 12944404 |
| 2/6/09 | 548603 | 27.14 | 14889085.42 |
| 2/9/09 | 98700 | 26.72 | 2637264 |
| 4/13/2009 | 3330 | 23.02 | 76656.6 |
| 4/15/2009 | 40000 | 23.06 | 922400 |
| 4/17/2009 | 3100 | 23.05 | 71455 |
| 4/23/2009 | 2513 | 23.01 | 57824.13 |
| 4/24/2009 | 60600 | 23.04 | 1396224 |
| 4/27/2009 | 30800 | 23.03 | 709324 |
| 4/28/2009 | 26400 | 23.1 | 609840 |
| 4/29/2009 | 100000 | 23.12 | 2312000 |
| 4/30/2009 | 100000 | 23.69 | 2369000 |
| 4/9/2009 | 41736 | 23.07 | 962849.52 |
| 5/1/2009 | 100000 | 24.57 | 2457000 |
| 5/11/2009 | 304045 | 26.08 | 7929493.6 |
| 5/12/2009 | 500000 | 26.25 | 13125000 |
| 5/13/2009 | 6002 | 26.05 | 156352.1 |
| 5/19/2009 | 18297 | 26.08 | 477185.76 |
| 5/20/2009 | 700 | 26.03 | 18221 |
| 5/26/2009 | 104600 | 26.1 | 2730060 |
| 5/27/2009 | 127300 | 26.2 | 3335260 |
| 5/28/2009 | 246600 | 26.34 | 6495444 |
| 5/29/2009 | 874589 | 27.02 | 23631394.78 |
| 5/5/2009 | 100000 | 24.47 | 2447000 |
| 5/6/2009 | 133527 | 24.75 | 3304793.25 |
| 5/7/2009 | 300000 | 25.49 | 7647000 |
| 5/8/2009 | 500000 | 26.04 | 13020000 |
| 6/1/2009 | 131630 | 27.53 | 3623773.9 |
| 6/1/2009 | 10972438 | 27.25 | 298998935.5 |
| Total Share Value | $ 535,853,523.92 | ||
| Dividends | $ 17,000,000.00 | ||
| Cash Payment | $ 418,000,000.00 | ||
| Termination Fee | $ 175,000,000.00 | ||
| Total | $1,145,853,523.92 |
