Just heard on WLS Chicago, Bershire Hathaway (SP?) is acquiring BNSF for $34 billion.
Story here. Wow.
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I heard this story as well on WGN this morning. I don't expect any immediate visible signs of change but as I live along the BNSF triple track "racetrack" in/out of Chicago it will be interesting to watch and see if there are any long term changes...but I expect not since BNSF is already a well run railroad.
htgguy Story here. Wow.
There is an old saying that says:" You can tell the men from the boys by the price of their toys!"
Looks loike Warren Buffet just bought the ulitmate boy's Christmas toy!
A Scale train layout! Only this is called the BNSF!
Hope he finds a tree to put it under! Way, Cool!
I thought he (Berkshire) already owned a substantial stake in BNSF.
Regardless - I don't think he's a railroader, which means he's looking for an investment, which speaks pretty highly of BNSF. I don't think he's a "raider," so we can presume he's in it for the long haul, as well.
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
Dear Mr. Buffet: As a fellow Nebraskan, I will be more than happy to watch over your rolling stock for you in the Star City! And when I come to Omaha, can we do lunch?
Yours truly,
Mookie
She who has no signature! cinscocom-tmw
Since my wife and I own Berkshire Hathaway stock I will be calling them to see if I can obtain a cab ride!
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
I hear he is also increasing his stake in Park Place and Marvin Gardens.
It will be interesting to see what the ripple effects are in the railroad industry. One thought that crosses my mind is whether or not this could lead to an agreement or merger to create a 2nd true transcontinental in North America. The timing is also interesting because the US Senate is now starting its move on climate change legislation and the carbon tax and I would think that would be a major problem for the BN unless the midwest dems break ranks to stop it.
I paid $27 per share for my BNSF stock a few years ago. Dividends have been good and now it will be sold for $100 or traded for Berkshire Hathaway.
All railroad stocks are up today. Fine with me. I own stock in other RR's, too. ...My broker said to divesify, but I said "No, railroads have become very efficient since deregulation in 1980, and the higher energy prices and highway congestion will increase rail market share. "
GARRY
HEARTLAND DIVISION, CB&Q RR
EVERYWHERE LOST; WE HUSTLE OUR CABOOSE FOR YOU
I own a lot (for me) of BNI stock. No, I didn't buy it at $116! It will be interesting to see what develops. Berkshire Hathaway also owns a lot of UP stock. Shall we merge? I hope not! I am not an "Uncle Pete" fan, having "traveled" (read: shunted into sidings while five freights pass, going in the same direction!) on their tracks on Amtrak. There IS a law! Fun is afoot!
Park Place and Marvin Gardens, as well as Pacific, North Carolina, Pennsylvania, and Boardwalk are already owned by Donald Trump. Mr. B. doesn't have a chance! "The Donald Rules!".
You, and I, should have bought BNI when it was at $16, not too long ago! Hind-sight is wunnerful!
I'm now looking at RailAmerica (RA), down a few bucks from its IPO a few days ago. Got nuthin' better to do! It's only money....
Since Warren Buffet enjoys a reputation as a relatively passive investor, this move will allow BNSF management the luxury of concentrating on maintaining and running the railroad without having to worry about corporate raiders.
oltmannd $100 a share, about $24 over yesterday's close. Not too shabby if you owned any BNI!
Just unbelievable - astounding ! ! ! Who'd a ever thunk it would have come to this ? Truly this is the big leagues. That'll surprise - and cuts out - the Wall Street 'quick buck' Mergers & Acquistions crowd. But ''They'll none of them be missed'' [from ''The Executioner's Song'' in the musical operatta The Mikado by Gilbert & Sullivan - how apt; pun not intended].
I do own a few shares - and I agree with Don's view above. That'a the good news, for my IRA account . . . and my wife has been wanting to invest in Berkshire Hathaway for a few years, so now I suppose that gets accomplished, too !
The bad news is that now I'll likely lose out on the opportunity to buy more, as well as the expected price appreciation over the next few years as BNSF continues to profit from its franchise.
I agree with just about all of the posts above. Notably, Warren is willing to pay that premium to put the transaction beyond any reasonable challenge or doubt of success - which also means he thinks even at that price, it's worthwhile. What I find a little surprising is that he wanted to buy it all - not just a majority or super-majority to obtain and ensure control. But he usually does that - if a deal is good, it's good all the way through - and he's been saying for the last few years that he's having trouble finding good places to put his money to good use. Guess he finally came to understand and believe what a lot of us have been saying for many years.
Next shoes to drop ? Buying anything else major in the railroad industry would have anti-trust concerns - except maybe Guilford/ Pan Am, which could use a kick like this, in my opinion. Maybe he could expand his ownership of Norfolk Southern, and insulate them from each other under his holding company ? But this morning he said no more railroads, and no more big deals for awhile. See the transcript of Buffet's call into CNBC this morning at:
http://www.businessinsider.com/buffett-americas-best-years-lie-ahead-2009-11
An excerpt [EMPHASIS ADDED - PDN]
KERNEN: IF YOU HAD TO JUST -- THERE'S A LOT OF REASONS TO LOVE THE RAILS, I KNOW, WARREN.BUT WHAT IS IT ABOUT THE FUTURE THAT MAKES THE RAILS SO ATTRACTIVE? WE'VE GOT TO MOVE STUFF, I KNOW. IS IT BECAUSE THEY CAN DO IT IN A COST EFFECTIVE WAY?BUFFETTl THEY DO IT IN A COST EFFECTIVE WAY AND EXTRAORDINARILY ENVIRONMENTALLY FRIENDLY WAY. BNSF LAST YEAR MOVED ON AVERAGE IT MOVED A TON OF GOODS 470 MILES ON ONE GALLON OF DIESEL. IT RELEASES FAR FEWER POLLUTANTS INTO THE ATMOSPHERE. IT SAVES ENORMOUSLY ON ENERGY CONSUMPTION AND, YOU KNOW, IT DIMINISHES HIGHWAY CONGESTION. RAILS LAST YEAR MOVED 40% -- MORE THAN 40% OVER THE COUNTRY. THEY MOVED MORE THAN ALL THOSE TRUCKS JUST THE FOUR BIG RAILROADS IT'S A VERY EFFECTIVE WAY OF MOVING GOODS. I BASICALLY BELIEVE THIS COUNTRY WILL PROSPER AND YOU'LL HAVE MORE PEOPLE MOVING MORE GOODS TEN AND 20 AND 30 YEARS FROM NOWAND THE RAILS SHOULD BENEFIT. IT'S A BET ON THE COUNTRY BASICALLY.
I also wonder if Warren's long-term outlook and access to the Berkshire Hathaway piggy-bank might accelerate BNSF's capital expenditures and improvements - such as electrifying sooner ? Note also that elsewhere in this transcript, Buffet noted that his utilities haven't been much affected by the recession. And per other sources, one of Buffet's heir apparents is Don Sokol, Chairman of MidAmerican Energy Holdings Co., which is Berkshire's energy division. See the following Aug. 5, 2009 article from Bloomberg News:
Buffett Fuels Succession Speculation by Tapping Sokol (Update2)
http://www.bloomberg.com/apps/news?pid=20601103&sid=axaWO.f7GdmQ
Now, if Warren would do something else with the 'Berkshire' portion of the compoany's name - like 'adopt' and sponsor or run one as an icon or 'mascot' on BNSF - none of whose constituent lines ever had a major fleet of 2-8-4's, I believe - then we'll be all set . . .
- Paul North.
BNSFwatcher Park Place and Marvin Gardens, as well as Pacific, North Carolina, Pennsylvania, and Boardwalk are already owned by Donald Trump. Mr. B. doesn't have a chance! "The Donald Rules!".
The only places 'The Donald' rules - and deserves to live - are his own dunghills. How many bankruptcies have he and his entities been through ?
It's a travesty to mention him in the same paragraph with Warren Buffett. Buffet's pocket change could buy Trump's entire empire, with some left over.
Trump, his ego, and his toupee refuse to acknowledge, accept, or work within reality, and his track record for his investors is miserable, if not scandalous. Buffett's been pretty much the opposite for many years. My money's on Warren - but Trump, I just ignore - turn the page or change the channel, as appropriate.
Like the barons of a century ago, is a private railroad car in the offing for the owner?
Maybe passenger trains with buffet cars.
how does that work for the other shareholders...shareholders no more? What if I don't want to sell my shares?
Ulrichhow does that work for the other shareholders...shareholders no more? What if I don't want to sell my shares?
Your shares are cancelled, and the cash value goes into an escrow account for you. You can collect the money if you wish.
RWM
Keep waiting for the other shoe to drop. So far it has all been pretty positive. So what's the down side of all this? I'm sure there must be be a wrinkle in all this "good news".
Carl
Railroader Emeritus (practiced railroading for 46 years--and in 2010 I finally got it right!)
CAACSCOCOM--I don't want to behave improperly, so I just won't behave at all. (SM)
I like Buffett..he's a smart man and a likeable individual. However, there is a downside for some of us smaller shareholders... This transaction highlights how little control we actually have over our own property. I would really be concerned if my retirement savings were riding on the fortunes of BNSF...following Buffett's own advice..invest in a FEW good businesses (like BNSF)...But what if i'm 65 and I'm suddely kicked out into an escrow account?
The prophecies given as why to buy may stand a better chance of coming true. Money is power and with the money to buy BNSF, decision makers do not dismiss what the new owner advocates.
Could be worse. BNSF could have been bought by Rupert Murdoch. Your division supervisor could have been Bill O'Reilly.
Quote from the article on TRAINS Newswire:
"There aren't a lot of people that can write $44 billion checks anymore,"
Oh, yeah!
AgentKid
So shovel the coal, let this rattler roll.
"A Train is a Place Going Somewhere" CP Rail Public Timetable
"O. S. Irricana"
. . . __ . ______
Warren Buffet said the deal is “all-in wager on the economic future of the United States.”
However, BNSF hauls vast amounts of imported products from ports of Los Angeles and Long Beach.
BNSFwatcherPark Place and Marvin Gardens, as well as Pacific, North Carolina, Pennsylvania, and Boardwalk are already owned by Donald Trump. Mr. B. doesn't have a chance! "The Donald Rules!".
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