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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: SOROS who wrote (4331)	8/12/2002 9:25:37 PM
From: stockman_scott	Respond to of 89467

Buffett on the lookout for bargain acquisitions in $20 billion spree By DAN LONKEVICH BLOOMBERG NEWS Saturday, August 10, 2002 OMAHA, Neb. -- Billionaire investor Warren Buffett's Berkshire Hathaway Inc. is on a $20 billion buying spree that some investors say has only just begun. So far this year, Buffett has joined with Lehman Brothers Holdings to provide $2 billion in financing to energy concern Williams Cos., invested $100 million in telecommunications specialist Level 3 Communications Inc., and bought two gas pipelines -- one from Williams for $450 million and one from Dynegy Inc. for $1.88 billion in cash and debt. After spending $4.24 billion this year and more than $15.4 billion over the past two years, Buffett still has as much as $40 billion in cash and short-term investments available for acquisitions. He said in his annual letter to shareholders in March that he wants to make acquisitions in the $5 billion to $20 billion range. "Absent a major catastrophe, this should be Berkshire's best year ever," said Keith Trauner, an analyst at Fairholme Capital Management, which manages $33 million and owns Berkshire shares. The stock market rout has created investment opportunities for Berkshire and also is helping the company's insurance businesses maintain price increases instituted since the Sept. 11 terrorist attacks, which cost Berkshire $2.28 billion and the insurance industry about $58 billion. Berkshire's second-quarter profit rose 35 percent as its insurance unit raised prices and had fewer claims. Net income rose to $1.05 billion, or $681 a share, from $773 million, or $506, a year ago. Earnings per share excluding gains from sales of securities were $673, compared with the $550 average estimate of analysts surveyed by Thomson First Call. "He's buying great assets from companies whose holding companies are in distress," said Fairholme's Trauner. Kern River, the pipeline Buffett's MidAmerican Energy unit bought from Williams, "is a great asset," Trauner said, considering how much it would cost in time and money to lay a new pipeline. Buffett in his letter to investors decried what he said was a lack of investment opportunities, saying Berkshire's size as well as market conditions such as outsized valuations make it impossible to replicate the company's past successes. "Two conditions at Berkshire are far different from what they once were: Then we could often buy businesses and securities at much lower valuations than now prevail; and more important, we were working with far less money than we now have," he said. He also said he needed to find "elephants," or large undervalued companies, to make significant gains. Buffett, who turns 72 this month, declined a request for an interview on possible acquisition targets. At his company's 2001 annual meeting, he said Berkshire may buy companies forced into bankruptcy.