Berkshire seeks to boost
its Wells Fargo stake above 10 percent
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[July 02, 2016]
By Jonathan Stempel
(Reuters) - Warren Buffett's Berkshire
Hathaway Inc <BRKa.N> is seeking permission from the Federal Reserve to
increase its ownership stake in Wells Fargo & Co <WFC.N>, after reaching
the 10 percent level that could prompt increased regulatory scrutiny.
According to papers obtained by Reuters on Friday, Berkshire said it
learned in mid-March that its Wells Fargo stake, including 2.01
million shares held by Buffett, had reached 10.01 percent because of
buybacks by the San Francisco-based bank, which decreased the number
of shares outstanding.
Though the stake later dipped to 9.97 percent, Berkshire said it has
again risen above 10 percent because of more buybacks by Wells,
which is the third-largest U.S. bank by assets. Berkshire said it
has bought no Wells Fargo shares since Oct. 21.
"Berkshire is seeking permission to retain its current ownership
position in Wells Fargo and to acquire additional shares of common
stock of Wells Fargo for investment purposes," according to the
papers, which were dated June 14 and submitted to the Federal
Reserve Bank of San Francisco.
The Federal Reserve exerts special oversight when investors take
large bank stakes.
Berkshire said it had no dollar value in mind for purchases, had no
plans to make significant changes to Wells Fargo's strategy or
corporate structure, and was not contemplating changes to the bank's
management or board.
Bloomberg News earlier reported the paperwork.
Berkshire's investment in Wells Fargo is worth more than $23
"We value Berkshire Hathaway as a long-term shareholder and
customer, and we appreciate the confidence that Berkshire’s
executive team has shown," Wells Fargo spokesman Ancel Martinez said
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A Wells Fargo branch is seen in the Chicago suburb of Evanston,
Illinois, February 10, 2015. REUTERS/Jim Young
Buffett has long been a supporter of Wells Fargo, calling it "very well run" and
a "terrific operation," and saying that Chief Executive John Stumpf has done a
The Federal Reserve exerts special oversight when investors take large bank
In a September 2008 policy statement, the Fed said it often lets investors take
double-digit stakes not designed to exert a "controlling influence," but would
review any resulting business relationships "case-by-case."
The U.S. Treasury Department has said it will not deem a 10 percent stake to
result in "control" of a big bank if an investor agrees in writing to limits on
Berkshire also owns 15.94 percent of American Express Co <AXP.N>, the
application and Reuters data show.
Based in Omaha, Nebraska, Berkshire also operates close to 90 businesses such as
auto insurer Geico, the BNSF railroad, Dairy Queen ice cream and various
apparel, energy and industrial companies.
(Reporting by Jonathan Stempel in New York; Editing by Marguerita Choy and
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