Berkshire climbs to $200,000 per share
NEW YORK -- Shares of Berkshire Hathaway Inc. on Thursday traded above $200,000 for the first time, further validating Chairman Warren Buffett's vision for building wealth at the company he's run for almost five decades.
The Class A shares climbed $3,241, or 2 percent, to close Thursday at $202,850 in New York. That's more than 60 times Seaboard Corp., the agribusiness and transportation company that has the second-highest price among stocks listed on U.S. exchanges.
"It's a huge milestone," said Buffett biographer Andrew Kilpatrick. "It proves how far things have come, and you start to wonder, and imagine in your wildest dreams, 'Where is this thing going?'"
Buffett has shunned the share splits favored by other large companies such as Apple and Wal-Mart Stores, saying a high price discourages short-term speculation. He also rejected a call to institute a dividend and rarely repurchases shares, giving him funds to build the company into the fifth-largest in the world by market value through acquisitions and stock picks.
Berkshire's workforce climbed to more than 330,000 at the end of 2013. Net income jumped to $19.5 billion last year from $11 billion in 2006.
-- The Associated Press
30-year mortgage rate falls to 4.12%
WASHINGTON -- Average long-term U.S. mortgage rates declined this week, approaching their lows for the year.
Mortgage company Freddie Mac, the Federal Home Loan Mortgage Corp., said the nationwide average for a 30-year loan slipped to 4.12 percent from 4.14 percent last week. The average for a 15-year mortgage, a popular choice for people who are refinancing, fell to 3.24 percent from 3.27 percent last week.
Mortgage rates are below the levels of a year ago. They have fallen in recent weeks after climbing last summer when the Federal Reserve began talking about reducing the monthly bond purchases it was making to keep long-term borrowing rates low.
Mortgage rates often follow the yield on the 10-year Treasury note. The 10-year note traded at 2.42 percent Wednesday, close to the year's low and down from 2.47 percent a week earlier.
-- The Associated Press
Shell sells gas rights for $2.1 billion
Royal Dutch Shell has agreed to sell drilling rights in shale formations in Louisiana and Wyoming for $2.1 billion in two transactions.
In one of the deals, announced Thursday, Shell will also receive drilling rights to land in Ohio and Pennsylvania.
Shell is working to focus its onshore U.S. drilling program on a few of the more prolific formations in an effort to boost profitability. The company wrote down the value of its shale acreage in the U.S. by $2.1 billion last year amid lower natural gas prices.
Shell will sell its Pinedale acreage in Wyoming to Ultra Petroleum for $925 million and 155,000 acres in the Utica and Marcellus shale formations in Ohio and Pennsylvania.
It will sell its Haynesville acreage in Louisiana to Vine Oil & Gas and the investment firm Blackstone for $1.2 billion.
Shell and other major oil and gas explorers regularly sell rights to fields where production is flat or declining. They then use that cash to fund exploration programs designed to discover new or more prolific fields that oil giants need to fuel growth. The Pinedale and Haynesville formations produce dry gas, which is less profitable than oil or so-called natural gas liquids, at relatively moderate rates.
-- The Associated Press
Exxon ends oil search in South Sudan
Exxon Mobil Corp., the U.S.'s largest oil company, ended exploration plans with Total SA in South Sudan, Total and the government said, a sign of faltering investor confidence in the African nation as a civil war enters its eighth month.
Exxon in April didn't renew an agreement with Total to negotiate for joint-exploration over parts of a 46,300-square-mile concession in Jonglei state, Total spokesman Anastasia Zhivulina said in an emailed response to questions. Total is still bidding to explore in partnership with Kuwait's state-owned Kuwait Foreign Exploration Petroleum Co., she said. Exxon spokesman Patrick McGinn said by email that the company doesn't comment on specific ventures.
"Losing the American oil company's interest is definitely a blow for the future prospects of South Sudan's oil industry," Luke Patey, a researcher on the country's industry at the Danish Institute for International Studies, said in an emailed response to questions. Exxon could re-enter South Sudan when security improves, he said.
Crude oil output, South Sudan's almost sole source of revenue, has fallen by at least a third to about 160,000 barrels-per-day since conflict erupted in December and the army battled rebels in two oil-producing states.
-- Bloomberg News
Chiquita rejects $61 million takeover bid
Chiquita Brands International Inc., owner of the namesake banana label, rejected an unsolicited $611 million takeover proposal from Cutrale Group and Safra Group and said it will continue with its planned purchase of Irish competitor Fyffes Plc.
Chiquita "remains committed" to completing the pending Fyffes deal, Charlotte, N.C.-based Chiquita said in a statement Thursday. The offer from Cutrale and Safra to buy Chiquita for $13 a share "is inadequate and not in the best interests of Chiquita shareholders," the company said.
"Chiquita has determined not to furnish information to, and have discussions and negotiations with, the Cutrale Group and the Safra Group at this time," Chiquita said in a letter to Cutrale and Safra, a copy of which was included in the statement.
The combination with Fyffes, proposed in March, would create the world's largest banana company. It also would cut Chiquita's tax bill by relocating its headquarters to Ireland, a process known as inversion that members of the U.S. Congress and President Barack Obama want to discourage.
Cutrale, a closely held fruit company controlled by Brazil's Jose Luis Cutrale, worked with banks controlled by Joseph Safra, Brazil's second-richest man, to challenge the Fyffes deal. Its buyout proposal was 29 percent more than Chiquita's closing share price Aug. 8, the last trading day before the offer was announced Monday.
-- Bloomberg News
Business on 08/15/2014