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Buffett bought Dow Jones before Murdoch deal

Billionaire Warren Buffett's holding company bought nearly 2.8 million shares of Dow Jones & Co. earlier this year before Rupert Murdoch sealed his deal to buy the Wall Street Journal's publisher.
/ Source: The Associated Press

Billionaire Warren Buffett's holding company bought nearly 2.8 million shares of Dow Jones & Co. earlier this year before Rupert Murdoch sealed his deal to buy the Wall Street Journal's publisher.

Berkshire Hathaway Inc. filed its quarterly summary of its $61.1 billion portfolio of U.S. stocks with the Securities and Exchange Commission on Tuesday. The filing did not state how much Berkshire paid for the Dow Jones shares, which closed at $36.33 the day before news of Murdoch's $60-per-share offer became public May 1.

Berkshire bought the Dow Jones shares sometime in April, May or June, so it could have paid as little as $34 a share. Berkshire held 2.78 million shares of Dow Jones stock, worth about $159.8 million, at the end of June.

The Dow Jones purchase runs counter to Buffett's well-established opinion that newspapers face long-term challenges because the economics of the business are eroding. But Berkshire's Dow Jones ownership is likely to be short term.

Murdoch's News Corp. reached an agreement to pay $5 billion to acquire Dow Jones on Aug. 1.

Berkshire's summary reveals several changes in the Omaha-based company's holdings as of June 30, but Berkshire's recent investments in two major freight railroads were omitted.

Berkshire received permission from the SEC to omit information about its investments in Union Pacific Corp. and Norfolk Southern Corp., which were first disclosed in May.

Berkshire regularly asks the Securities and Exchange Commission for the ability not to immediately disclose its holdings. Berkshire says the information could hurt its trading strategy because the market likes to follow what the "Oracle of Omaha's" company does.

In May, Berkshire revealed the company owned 10.5 million shares of Union Pacific and nearly 6.4 million shares of Norfolk Southern. The news of Berkshire's railroad investments sent shares of all major freight railroads soaring.

Earlier this month, Berkshire said in SEC filings it had added to its railroad holdings by buying 1.62 million shares of Burlington Northern Santa Fe Corp. Berkshire owns 40.65 million shares, or about 11.5 percent of the Fort Worth, Texas-based railroad.

Different disclosure rules apply to the BNSF investment because Berkshire owns more than 10 percent of that company.

Buffett's assistant Debbie Bosanek said Tuesday that Berkshire would not comment on its investments beyond what the government requires the company to disclose.

The filing does not differentiate between investments Berkshire makes, investments any of its more than 60 subsidiaries make, or investments Buffett himself makes.

Berkshire added to its banking holdings with a new investment in 8.7 million shares of Bank of America Corp., worth about $425.3 million. Berkshire also added to its already sizable investments in Wells Fargo & Co. and U.S. Bancorp during the quarter and maintained its 6.7 million shares of M&T Bank Corp.

Berkshire increased its stake in U.S. Bank's parent company from 23.3 million shares at the end of March to 37.1 million shares worth $839.6 million at the end of June.

Berkshire added about 25.5 million shares of Wells Fargo during the quarter. It owned 257.7 million shares of Wells Fargo worth about $9.1 billion at the end of June. That represents nearly 8 percent of Wells Fargo.

Between March 31 and June 30, Berkshire also made several other moves, including:

  • Selling its last 1.25 million shares of tax preparer H&R Block Inc. Berkshire had been selling that investment since last September when it owned 10.97 million shares of H&R Block.
  • Doubling its stake in Nike Inc. to 8 million shares worth about $466.3 million.
  • Selling its last 1.48 million shares of retailer Pier 1 Imports Inc.
  • Unloading nearly 6.7 million shares of Western Union. Berkshire still holds about 3.2 million shares of the company.
  • Buying 2.7 million more shares of French drug maker Sanofi-Aventis to bring its stake to 3.5 million shares.
  • Increasing holdings in Johnson & Johnson and Procter & Gamble Co. Berkshire now owns 53.1 million shares of Johnson & Johnson and 105.2 million shares of Procter & Gamble.

Berkshire owns furniture, insurance, jewelry and candy companies, restaurants, natural gas and corporate jet firms in addition to its investments.