Buffett makes appeal to Burlington investors

Warren Buffett and Burlington Northern's CEO reach out to investors to raise support before shareholder vote.

By TheStreet Staff Jan 5, 2010 12:42PM

TheStreetBy Eric Rosenbaum, TheStreet

 

Warren Buffett may be worried that Kraft Foods (KFT) is about to overpay for Cadbury (CBY) in the Chocolate War, but he hasn't taken his eye off the railroad industry prize: Burlington Northern Santa Fe (BNI).

 

On Monday, Burlington mailed out a glossy eight-page brochure to its shareholders with a photo of the Berkshire Hathaway (BRK.A BRK.B) investment guru and Burlington Chief Executive Matthew Rose on the cover and the words “We need your support.” The brochure repeats Buffett’s characterization of the deal as an "all-in wager on the economic future of the U.S."

 

Buffett and Rose are going the extra mile ahead of the shareholder vote scheduled for Feb 11.  

 

Find a new broker for 2010

 

The legendary investor finds himself in an interesting position in the merger-and-acquisition world. He’s reaching out to Burlington shareholders to boost support for his proposed takeover of the railroad, while also publicly chastising Kraft for potentially overpaying for Cadbury.

 

Last week, Burlington completed its comprehensive filing with the Securities and Exchange Commission detailing the proposed takeover by Berkshire Hathaway. The filing included some conservative estimates by Burlington management for growth in 2010, which led to a selloff in rail stocks after Barron's picked up on the filing's details.

 

Still, recent growth in rail volumes from players like Union Pacific (UNP) and CSX (CSX) shows encouraging signs for the industry.

 

Related Articles

 

Buffett's hits and misses in 2009

 

Buffett's big bets trail indexes in 2009

 

Rail volumes hit 2010 on right track

 

 

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