Date
18 August 2018
Berkshire Hathaway, controlled by billionaire investor Warren Buffett, has loosed its policy on stock repurchases. Photo: Reuters
Berkshire Hathaway, controlled by billionaire investor Warren Buffett, has loosed its policy on stock repurchases. Photo: Reuters

Buffett’s Berkshire Hathaway eases policy on stock buybacks

Berkshire Hathaway has eliminated a restriction on its ability to buy back its own stock, a change that could help billionaire chief Warren Buffett deploy more of the conglomerate’s cash, Reuters reports.

The new policy approved by Berkshire’s board on Tuesday lets Chairman Buffett and Vice Chairman Charlie Munger authorize buybacks when both believe the repurchase price is “below Berkshire’s intrinsic value,” the report said.

Under Berkshire’s old policy, repurchase prices would not exceed 1.2 times book value per share.

The new policy is a major change for Berkshire, where Buffett has faced pressure to deploy more than US$108 billion of cash and equivalents, Reuters noted.

Berkshire’s Class A shares closed Tuesday at US$288,500, roughly 1.37 times its US$211,184 book value per share as of March 31.

Berkshire raised its repurchase threshold to 1.2 times book value from 1.1 times in December 2012.

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