Berkshire Audit Report: David Sokol’s Trading Violated Company Insider Trading Policies and Procedures

Wednesday, 27 April, 2011

Today Berkshire Hathaway‘s Audit Committee released its report, “Trading in Lubrizol Corporation Shares by David Sokol” (PDF file). Have a read. Here is a notable paragraph,

“Mr. Sokol’s answer to Berkshire Hathaway’s CFO, Mr. Hamburg, concerning the investment bankers similarly fell short of the degree of candor required of a corporate fiduciary, and suggests his answer to Mr. Buffett’s earlier inquiry noted above was intended to deceive.

Check out what Alice is saying in “World Learns New Facts Showing Buffett Was Misled” (here is an excerpt),

“However, upon several readings of this release, there do not appear to be *any* new significant facts that were unknown to Berkshire on March 30th when its initial press release was issued. These facts are only *new* to those of us who are reading the audit committee report “

and “Sokol Fights Back Round 1“.

Here are some notable media reports.

Bloomberg (Alice Schroeder), “Buffett Disciples Want ‘Oracle’ to Come Clean” [Apr 28 update] Highly recommended reading. Have a watch of Alice’s Bloomberg video interview. Here is an excerpt from the article (emphasis added),

“The problem isn’t the about-face. It is the missing explanation for why Berkshire went so easy on Sokol in the first place. Whatever the detailed reasons, ultimately it boils down to Berkshire’s reliance on Buffett’s personal judgment about his managers and his ability to delegate to them to the point of abdication. When this one-man infrastructure makes a mistake, it’s hard to admit that Buffett is at fault. Changes in the way the company is managed are personal, not corporate. Under the circumstances, the temptation is high to blame everything on a single rogue employee. That doesn’t excuse Sokol’s behavior, but the failure of oversight needs to be acknowledged and corrected. [...] Read the rest of this entry »


Biggest Canadian National Railway shareholder is …

Monday, 25 April, 2011

Who would have guessed, “Bill Gates now biggest CN shareholder“?

“Microsoft co-founder Bill Gates is the largest shareholder in Montreal-based Canadian National Railway, according to disclosures released ahead of the company’s annual meeting on Wednesday.

The world’s second-richest man owned or control 10.04 per cent of its shares, worth $3.2 billion as of Feb. 25.

That’s based on CN’s closing share price of $70.16 Monday.

Gates has been building a position in Canada’s largest rail company since 2006.

A company proxy circular says he holds the 46.07 million shares through Cascade Investment and as co-trustee of the Bill & Melinda Gates Foundation Trust.”


Cisco shutdowns Flip Video

Tuesday, 12 April, 2011

Cisco kills Flip Video - pix 2

Today, on April 12th, 2011, Cisco shutdowns its consumer video division Flip.

 

Cisco kills Flip Video - pix 1

Barrage of questions for Warren Buffett at this month at Berkshire Hathaway’s annual meeting?

Friday, 8 April, 2011

Have a read of Alice’s “Annual Meeting“,

“> Becky Quick. Has put away the pompoms. Taking a sober, detached and traditionally journalistic stance toward Berkshire/Sokol/Buffett.”

and Andrew’s “Buffett’s Ruthlessness Is Oddly Absent on Sokol” (here are two questions Andrew has, emphasis added).

“¶You have said that Mr. Sokol did not do anything “unlawful.” But Mr. Sokol bought shares of Lubrizol a day after he told Citigroup to indicate Berkshire’s interest in buying the company.

Why don’t you consider that “material” information, a crucial component of insider trading? Do you not believe that a Lubrizol shareholder would have considered such information important to their investment decision? Clearly Lubrizol felt that Mr. Sokol’s inquiry was material enough to hold a board meeting on Jan. 6, one day before Mr. Sokol bought almost $10 million of shares.

If Mr. Sokol was aware of Lubrizol’s board meeting, would you consider that material information? And if a news outlet had reported Mr. Sokol’s inquiry or Lubrizol’s decision to meet, do you not think that the price of Lubrizol’s shares would have risen?

Here is another way to think about it: If a Citigroup banker had bought shares of Lubrizol at the same time as Mr. Sokol, would you have considered that insider trading? Isn’t that the definition of insider trading? What did Mr. Sokol do that was different?

¶Berkshire has always been a very decentralized institution with only 21 of its 257,000 employees working at headquarters and each subsidiary left to its own devices. “Most of these managers are happiest when they are left alone to run their businesses, and that is customarily just how we leave them,” you recently wrote in the annual letter.

This structure might seem like a bastion of efficiency. But given Mr. Sokol’s possible transgressions, do you now think Berkshire needs more compliance programs and people to manage them?

P.S. I have never thought I would be tagging a post about Warren with “ethics” where I question if it is sadly missing.

Update: “Bloomberg Columnist Schroeder on Berkshire Holdings” (with video)


Whatever happened to Warren Buffett’s famous saying, “Lose a shred of reputation for the firm, and I will be ruthless”? – 96,400 free lottery tickets ($3 million winnings)

Thursday, 31 March, 2011

April 13th, 2011 Update: MarketWatch, “David Sokol knew of progress toward a possible Berkshire Hathaway Inc. bid for Lubrizol Corp. before he bought almost $10 million worth of stock in the lubricant company, according to a new regulatory filing.

April 1st, 2011 Update: “Sokol affair “credit negative” for Berkshire: Moody’s

Alice’s “Moody’s Weighs In on Sokol, Cites Succession Risk

***

As a fan of Warren Buffett, it saddens me to see David Sokol‘s surprise resignation, Warren’s press release about the resignation, and Sokol‘s CNBC appearance this morning. Seeing these and the many news reports today lead me to question if Warren has forgotten his saying as told in the 1996 book Buffett: The Making of An American Capitalist,

Lose money for my firm and I will be understanding; lose a shred of reputation for the firm, and I will be ruthless.

Alice Schroeder has become my “go-to” expert on all things Warren and Berkshire since she published Warren’s biography “Snowball” in 2008 and what I’ve learned of her as a reporter and as a person. I highly recommend you read Alice’s Bloomberg opinion piece, “Buffett Misses Chance to Show Moral Courage: Alice Schroeder” and her blog entry.

I think it is very important for someone like Alice to speak up and hold Warren accountable while his mind is still very sharp. I think Warren has set up some bad precedence for the next CEO. (Or may be this mess will paradoxically serve as what NOT to do?)

Here are excerpts from Alice’s opinion (emphasis added),

What were they thinking? How could Warren Buffett excuse David Sokol’s trading in Lubrizol Corp. (LZ) stock while Sokol was pitching the company to Berkshire Hathaway Inc. (BRK/A) as an acquisition candidate?

Buffett and Sokol both say that nothing “unlawful” was going on (Sokol even went so far as to tell CNBC he did nothing inappropriate). Their explanation is that, because a deal with Lubrizol hadn’t actually been struck and wasn’t likely when Sokol bought his shares, it was all right for Sokol to profit from his knowledge of a possible deal.

On Wall Street, we call this kind of trading front-running, and everybody knows that it is wrong. People get fired for doing it. [...]

Lottery Tickets

In substance, when Sokol pitched the deal to Buffett, he was holding stock in Lubrizol that had the equivalent of free lottery tickets attached. These 96,400 lottery tickets gave Sokol unfair odds — odds far better than in the kind of lottery the general public gets to play. Read the rest of this entry »


Warren Buffett’s (PR) nightmare – David Sokol’s surprise resignation and Buffett’s “unusual” statement

Thursday, 31 March, 2011

Update 1:07am MST, Apr 1, 2011: “CNBC TRANSCRIPT: David Sokol Defends His Controversial Lubrizol Stock Purchases

Update 8:57pm MST, March 31: Bloomberg, “Buffett Misses Chance to Show Moral Courage: Alice Schroeder

Update 9:17am MST: CNBC, “Sokol to CNBC: I Shouldn’t Have Told Buffett I Liked Lubrizol” (with extensive video interview of Sokol)

NYT DealBook entry after Sokol CNBC appearance, “The Perception of the Sokol Situation

Watch the CNBC Sokol interview first, Bloomberg TV interview, “Jeffrey Matthews Interview on Sokol, Buffett”

CNBC, “LIVE BLOG – David Sokol’s Live Interview on CNBC’s Squawk Box”

***

Today is not a good day for Warren Buffett or Berkshire Hathaway shareholders.

* Here is the unusual statement/official news release “Warren E. Buffett, CEO of Berkshire Hathaway – Announces the Resignation of David L. Sokol” (PDF file)

Paradoxically, the most damaging bit may be the second last paragraph, “I have held back nothing in this statement. Therefore, if questioned about this matter in the future, I will simply refer the questioner back to this release.” To me, this is in full prep mode to fight with lawyers (SEC lawyers, et al). A totally silence after issuing such an “unusual” statement is asking for serious headline news trouble! (see more excerpt at the end) I hope I am wrong here.

* NYT DealBook, “Abrupt Exit for a Top Deputy to Warren Buffett

* CNBC Warren Buffett Watch, “Surprise Resignation of Leading Buffett Successor Raises Unanswered Questions” (with video)

* More excerpt from the official news release,

“Finally, Dave brought the idea for purchasing Lubrizol to me on either January 14 or 15. Initially, I was unimpressed, but after his report of a January 25 talk with its CEO, James Hambrick, I quickly warmed to the idea. Though the offer to purchase was entirely my decision, supported by Berkshire’s Board on March 13, it would not have occurred without Dave’s early efforts. Read the rest of this entry »


Warren Buffett’s NetJets Orders Up To 120 Bombardier Global Business Jets

Wednesday, 2 March, 2011

From Reuters,

Bombardier Inc (BBDb.TO) has agreed to sell as many as 120 aircraft to Warren Buffett’s NetJets Inc in a deal that could earn it more than $6.7 billion.

The deal, consisting of a firm order of 50 jets and options to purchase a further 70, is the largest business aircraft sale for Bombardier, the world’s No. 3 civil aircraft maker after Airbus (EAD.PA) and Boeing (BA.N).

While airlines still account for the majority of corporate travel, many businesses are gradually returning to private planes. They are eager to avoid airport hassles, flight delays and other potential logistical snags associated with commercial flying.”

In the current economic climate, I think it is nice for Bombardier to have this deal. At the same time, I bet NetJets is getting a pretty good deal for the jets too. Alice Schroeder, Buffett’s biographer, wrote about NetJets earlier this week here and here before this deal. It will be interesting to hear what she has to say on this deal.

Now, here is a video clip of what Warren talking about the deal on CNBC (with transcript).

P.S. Warren has previous experience in airlines related investments. Since we are talking about a lot more money here, I hope it works out better (much better) this time around.

***

March 6th, 2011 Update: Financial Post, “Worldwide Private Aviation Leader NetJets Inc. Announces Purchase Agreement for Bombardier Business Aircraft” Here is an excerpt with emphasis and comment added. And yes, I was a bit of an idiot to miss it.

“The agreement includes a firm order from NetJets for 50 Global business jets valued at a retail price of $2.8 billion, with options for an additional 70 Global aircraft. The firm order comprises 30 Global 5000 Vision and Global Express XRS Vision aircraft, with deliveries scheduled to begin in the fourth quarter of 2012, as well as 20 firm orders for Bombardier’s newly-launched Global 7000 and Global 8000 jets, with deliveries of these aircraft to begin in 2017. At a total retail price exceeding $6.7B, this is the largest aircraft purchase agreement in the history of private aviation. Additional terms of the deal were not disclosed.”

[Kempton: First of all, how could I missed "retail price"?! You must be kidding me that Warren Buffett or CEO of NetJets David Sokol would pay retail price during a recession for jets! Therefore someheavy discounting is probably happening here. And the option for additional 70 jets, probably cost nothing or just a token amount.]


Warren Buffett having some fun (CNBC videos and transcripts)

Wednesday, 2 March, 2011

The following are links to videos and transcripts of Warren Buffett having some fun on CNBC and, in a sense, putting up a big free TV ad to attract profitable businesses to sell to him.

Part 1 “Most Berkshire Businesses ‘Inching Along”, Part 2 “The ‘Zebra’ That Got Away”, Part 3 “‘Elephant Gun’ Targets & Riding the Railroad”, Part 4″Blame Bankers, Bankers, Bankers?”, Part 5 “Cars and Bricks”, Part 6 “China and America’s Diminishing Dominance”, Part 7 “What Should Happen to CEOs of Failed Companies”.


Forget gold

Tuesday, 19 October, 2010

Warren Buffett has never liked gold. This Fortune excerpt explains a little bit of the why, “Warren Buffett: Forget gold, buy stocks“,

“My first question, as I sit there on the couch in his office, is: “What about gold? Is this a classic bubble or what?

“Look,” he says, with his usual confident laugh. “You could take all the gold that’s ever been mined, and it would fill a cube 67 feet in each direction. For what that’s worth at current gold prices, you could buy all — not some — all of the farmland in the United States. Plus, you could buy 10 Exxon Mobils, plus have $1 trillion of walking-around money. Or you could have a big cube of metal. Which would you take? Which is going to produce more value?

Okay, so gold is not a screaming buy to Buffett.”


Financial Humour: AIG, AIA IPO, HK$18.38 to $HK19.68

Monday, 4 October, 2010

You have to know a little bit of Chinese and Chinese culture to appreciate the unintended humour or comedy in this Bloomberg headline and story, “AIG Said to Offer AIA Stock at HK$18.38 to $HK19.68 in Initial Share Sale“.

Love to hear in the comments section if any readers also find this news funny.

P.S. I am normally not a betting man (unless the odds are with me), in this case, I am willing to bet $10 that, within the about IPO price range, there will at least be two prices that will NOT be used. :)


Skype estimated US$100m offering

Tuesday, 10 August, 2010

Skype’s offering document at the SEC contains some interesting financial info, risk factors, etc about the company. Enjoy. [HT G&M]

For example, here is an interesting excerpt that helps understand Skype as an operating business, (emphasis added)

“Many of our products are free. As a result, we have generated nearly all of our historical revenues from our paid communications services products, which are purchased by a small minority of our users. During the three months ended June 30, 2010, we generated on average net revenues from calls made by approximately 8.1 million paying users to landline or mobile phones. These paying users represented less than 7% of our average connected users during this period. If even a small percentage of our paying users cease paying for our products, this could have a significant impact on our net revenues.

In addition, we have historically derived a substantial portion of our net revenues from a single product—SkypeOut. For the pro forma year ended December 31, 2009 and for the six months ended June 30, 2010, 86% and 87% of our pro forma net revenues and net revenues, respectively, were derived from the use of SkypeOut. Due to this dependence on SkypeOut as our primary source of net revenues, we are subject to an elevated risk of reduced demand for our SkypeOut product.”

****

Aug 13, 2010 Update: Check out this interesting blog entry, “What the Skype IPO Filing Says About Facebook“.


Chocolate bonds

Wednesday, 26 May, 2010

Two recent chocolate “investments”,


Edmonton-based Matrikon to be acquired by Honeywell

Thursday, 13 May, 2010

As a shareholder of the Edmonton-based Matrikon, a leading provider of industrial performance monitoring solutions, I woke up to the news of “Matrikon to be acquired by Honeywell for $4.50 CAD per share“. Here is an excerpt from the press release,

Matrikon will be integrated into Honeywell Process Solutions, which is part of Honeywell’s Automation and Control Solutions business group.

“Our industrial customers want their plants to run well in any economy, and Matrikon’s products help do that,” said Norm Gilsdorf, president of Honeywell Process Solutions. “Combining Matrikon’s technology and expertise with Honeywell’s industrial platform expands our offering to help customers continue to improve plant performance. This is a great addition to our business.”

Matrikon will bring to Honeywell complementary applications that monitor oil and gas well performance and mining equipment, as well as supply chain solutions for mining. Matrikon’s cyber-security and alarm management solutions also align with Honeywell’s solutions for process safety and security.

Nizar J. Somji, president and CEO of Matrikon stated: “This amalgamation is a tremendous opportunity for all Matrikon stakeholders, our shareholders, clients and employees. We believe that the path we embarked on with our next generation technology and our product and solution strategy blends well with Honeywell’s technology vision. This combination will enable Matrikon to continue to realize global opportunities for large scale solution deployments and will provide the foundation to support our vision of long-term technology partnerships with our clients.

(More news: G&M, Bloomberg, Edmonton Journal)

If I look at the capital appreciation/investment gain alone, I should be really happy. But truth be told, I like the company’s dividends and future business growth potential enough that I actually think the company is worth more than C$4.50 to me in the long run. Plus it has been a lot of fun following Matrikon’s technical innovation and marketing development.

Now, like my fellow Matrikon shareholders, we have a happy-ish task of redeploying some capital. Fortunately, for small-time investors like me (as oppose to him), there are still many interesting small investment opportunities available in the market if we are willing to spend some time to study the various publicly listed companies’ annual reports, MD&As, etc.

Have fun studying the potential companies and best of luck in your investment decisions.


$1 million, $1 million, $1 million – $100,000 $100,000 $100,000 – Managers’ Compensations – The Warren Buffett Way

Tuesday, 4 May, 2010

Alice Schroeder, the insightful and independent biographer of Warren Buffett’s “The Snowball“, posted three interesting entries in her blog in the last few days.

I love “Manager” Compensation, here is an excerpt,

“The files are full of letters that say, $1 million, $1 million, $1 million, $1 million. Some deviations plus or minus but rarely more than a few million. Mostly it is repetitious — $1 million, $1 million, $1 million, $1 million. After all, these guys are mindful their boss makes $100,000 a year.”

Also check out,

Low Attendance” (excerpt: “A big-time reporter sought me out last week in desperation because of difficulty getting quality interviews. “Nobody is going to the meeting” this reporter said. Now, obviously a lot of people went to the meeting, 40,000 people or so. But the serious money managers this particular reporter wanted to interview were not going.“)

and

Huge Mistakes Were Made at NetJets” (excerpt: “Rich talked to Warren nearly every single day — I witnessed it. NetJets was not some rogue operation buying planes at high prices without Warren’s knowledge, understanding, or consent.“).

and

First of Many” – Some of Alice’s key takeaways from the Berkshire AGM.


Kempton’s notes & “insights” on Warren Buffett’s 2009 letter to shareholders & BRK annual report

Saturday, 27 February, 2010

Go ahead, download a copy of Warren Buffett’s letter to shareholders & BRK annual report and read it. I will never advise my readers of what stocks to buy or at what prices, I believe it is the readers’ job. If people want to invest their money and receive the associated gain/lose as a result, it is only fair that they are responsible for their investment actions.

But to me, reading Warren Buffett’s letter is a FREE exercise of the brain one should engage our minds once a year if we can. And I am fully aware that great investor of Warren’s success and one who is so willing to share his insights (in a way with minimum agenda) will likely not come by for a long time (or in my lifetime). So I treasure the pleasure in reading Warren’s letter every year.

The following are my notes and “insights” on Warren Buffett’s 2009 letter to shareholders & BRK annual report. This article will be updated frequently today and the next few days as I get a chance to read more. Come back often to check.

*** Page ref are based on the printed page numbers. Emphasis added. ***

Note: I am reading in a “random” manner” so you will see my comments appearing out of sequence. I will try to read both the letter (pg 1-22) and the MD&A section (pg 61-94).

*** pg 15 – When it’s raining gold ***

“We told you last year that very unusual conditions then existed in the corporate and municipal bond markets and that these securities were ridiculously cheap [...] Big opportunities come infrequently. When it’s raining gold, reach for a bucket, not a thimble.” [Kempton: Of course, the challenge and the wisdom is in recognizing "big_and_solid" opportunities and not just "big_and_wishful_thinking" opportunities. (smile)] [HT Alex]

*** pg 16 – Risk Control ***

Charlie and I believe that a CEO must not delegate risk control. It’s simply too important. […] If Berkshire ever gets in trouble, it will be my fault. It will not be because of misjudgments made by a Risk Committee or Chief Risk Officer.”

Read the rest of this entry »


What Peter learned from his dad Warren Buffett

Friday, 26 February, 2010

Great BusinessWeek article “What I Learned from My Dad – When his youngest son decided to become a musician, Buffett offered moral but not financial support“. Here is an excerpt (emphasis added),

One of my father’s often-quoted tenets is that a parent, if he has the means to do so, should give his children “enough to do anything, but not enough to do nothing.” A head start is fine; a free pass is often a crippling disservice. When I turned 19, I received my inheritance—proceeds from the sale of a farm, which my father converted into Berkshire Hathaway (BRK.A) stock. At the time I received them, the shares were worth roughly $90,000. It was understood that I should expect nothing more.

So—what to do with the money? I was a student at Stanford University; there were no strings attached. Fortunately, I’d had the advantage of seeing my older siblings burn through most of their cash; I didn’t want to follow down that path. At the other extreme, I might have done absolutely nothing with that stock—just left it in an account and forgotten about it. If I’d picked that option, my shares would now be worth around $72 million. But I didn’t make that choice, and I don’t regret it for a second. People think I’m either lying or crazy when I say this, but it happens to be true, because I used my nest egg to buy something more valuable than money: I used it to buy time. [Kempton: Time is the greatest equalizer in life. No one, absolutely no one can buy time lost or buy more time.]

It has not lost on me how Mr. Li Ka-Shing, the richest man in HK, had decided to bring up his two sons (see this biography).


Saturday morning reading: Buffett’s Letter to Shareholders

Friday, 26 February, 2010

Feb 27 Update: Have a read of “Kempton’s notes & “insights” on Warren Buffett’s 2009 letter to shareholders & BRK annual report“.

***

Got a new plan after tomorrow at 6am MST, “Warren Buffett’s Popular Letter to Shareholders Set for Saturday Morning Delivery“.

Download the 2009 Annual report after 6am MST, Feb 27, 2010.


Volcker Rule – Paul Volcker is back (big time)

Thursday, 21 January, 2010

Former Fed Chairman Paul Volcker is back (big time), and his decision will likely impact your investment in US banks and financial institutions. In fact, Canadian and international depositing taking and loan-making banks operating in the US may likely be equally impacted as well.

The “Volcker Rule” in the words of President Obama (emphasis added),

Banks will no longer be allowed to own, invest, or sponsor hedge funds, private equity funds, or proprietary trading operations for their own profit, unrelated to serving their customers. If financial firms want to trade for profit, that’s something they’re free to do. Indeed, doing so–responsibly–is a good thing for the markets and the economy. But these firms should not be allowed to run these hedge funds and private equities funds while running a bank backed by the American people.

An excerpt and more info from WSJ (emphasis added),

Now all of the sudden Volcker gets a “rule” to call his very own? In the world of politics, getting a “rule,” or better yet a “doctrine,” is not-quite having an airport named after you, but it ain’t far off.

So what’s changed?

For one thing, the stunning loss of the Ted Kennedy’s U.S. Senate seat to a Republican seems to have refocused the administration’s attention on demonstrating to the American public that it sees the economy as job one.

And looking around at his economic braintrust, there aren’t too many that are exactly adored by voters.

From MarketWatch “A return to sanity in banking – Commentary: Obama bank plan is a response that fits the crisis

The sweeping reform President Barack Obama unveiled Thursday is short on detail, but in its broadest terms it aims to both preserve Wall Street’s ability to take risk and strengthen the money system at the core of banking.

Finally, someone with the power to make it happen is talking about a response equal in scope to the system’s failure. [...]

Eliminating those conflicts is where the Volcker Rule is aimed. The president and former Federal Reserve Chairman Paul Volcker have agreed that banks need to get back to banking. The approach outlined Thursday may not be perfect, but its intent is to make the money and credit market safe and limit the impact of shadow bankers.

Think about how our language has reflected the shift in financial services. For 60 years after Depression Era reforms were passed, there was a clear line: Banks made loans and took deposits and investment banks handled securities — stocks and bonds and their derivatives.


Kraft to buy Cadbury for $19 billion

Tuesday, 19 January, 2010

From BBC “Kraft and Cadbury: How they compare” (emphasis added),

The boards of Cadbury and US giant Kraft Foods have agreed a deal which will see Kraft takeover the British chocolate maker in a deal valuing the company at £11.5bn [~US$19.5 billion].

It means that the world’s second-biggest confectionery company will form part of the world’s second-largest food company. This is how the two firms currently stack up.

From NYT “Behind Kraft’s Raise, a Glimmer of Bigger Savings” (emphasis added),

Irene Rosenfeld, Kraft’s chief executive, partially justified the higher price on an analyst conference call by announcing that she expects her company to reap an extra $50 million in annual cost savings through the merger. That brings the total figure to $675 million.

At a standard 10 percent discount rate, Kraft was essentially authorized to spend around another $500 million today for Cadbury, which is a little less than a fifth of what they ended up shelling out extra for the company.

From NYT “For Britain, Cadbury Takeover Isn’t Easy to Swallow“,

Prime Minister Gordon Brown said at a press conference that his government was “determined that the levels of investment that take place in Cadburys in the United Kingdom are maintained,” and, “at a time when people are worried about their jobs, that jobs in Cadbury can be secure.”

Cadbury employs 6,000 people in Great Britain, and more than 46,000 worldwide.

During its conference call Tuesday, Kraft reiterated that it would keep a strong presence in Britain and would be a “net importer” of jobs in the country.

And for those who has paid attention to the deal and Warren Buffett‘s public opinion of the deal, Alice Schroeder (biographer of Buffett) made some insightful observations in “Buffett Orchestrates Kraft-Cadbury Deal” (emphasis added),

[...] why did Buffett make his announcement that Berkshire would vote against a deal that included more stock? Why didn’t he just tell Irene Rosenfeld that in private? Why set off a frenzy of rumors about a rift between the two of them?

True, lines drawn in the sand in public are taken more seriously than warnings made in private. And Buffett’s message was sent to all parties concerned – especially, perhaps, the arbs and Cadbury.


Everybody loves Canada (Canada’s euro bond sale finds big demand)

Saturday, 9 January, 2010

Boyd Erman at G&M noted in “Canada’s euro bond sale finds big demand” (emphasis added),

Everybody loves Canada.

That’s the conclusion after the government raised €2-billion in a sale this week [...]

The federal goverment is paying 6 basis points less to borrow than similar bonds issued by the French, and 4 basis points below the rate on the Dutch benchmark. (A basis point is 1/100 of a percentage point.)


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