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Capturing Uncle Warren's Bid Premium

www.blindsquirrelmacro.com

Capturing Uncle Warren's Bid Premium

Mini Acorn. An asymmetric opportunity in Occidental Petroleum.

Apr 1, 2023
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Capturing Uncle Warren's Bid Premium

www.blindsquirrelmacro.com
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The 🐿️ has been a subscriber to

Open Insights
for a while now. They have been producing excellent work, with a focus on energy markets, in an amusing and highly readable style. Occidental Petroleum OXY 0.00%↑ is one of their “larger” positions and OI has written several pieces about the company and Berkshire Hathaway’s increasing interest in it.

In their most recent piece, published earlier today (link below) they look into the mechanics of what a Berkshire Hathaway take private could look like.

Open Insights
What Could a Berkshire Acquisition of OXY Look Like?
What would a Buffett acquisition of OXY look like? It’s a simple question, and one we decided to take a look at the other day. As readers know, OXY is somewhat of a larger position for us, so it behooves us to dive a bit into the mechanics of what’s happening when the company’s largest shareholder continues to inhale shares…
Read more
8 months ago · 6 likes · 11 comments · Open Insights

We shall let you read directly from OI on industrial logic and synergies, and skip straight to tactics:

“we think an acquisition is likely at this stage because really, there’s no reason to buy +23% of an oil producer (+30% if you assume that Buffett exercises his warrants to purchase 83.86M shares of common stock) unless you plan on taking it out. It’s not like you’d want to own a commodity company for its stable cash flows.”

Open Insights

Bottom line, Uncle Warren does not play by the conventional rules of negotiation. He na…

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