Buffett's Burlington Breakup Fee Shows Confidence

Nov 4th, 2009 - Bloomberg

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Buffett's Burlington Breakup Fee Shows Confidence

Nov. 4 (Bloomberg) -- Berkshire Hathaway Inc., the companythat agreed to buy Burlington Northern Santa Fe Corp. in itsbiggest takeover, accepted a lower-than-usual breakup fee in asign Warren Buffett expects no one will top his bid.

Berkshire will receive $264 million if Burlington, thebiggest U.S. railroad, cancels the agreement, according to afiling yesterday. That’s less than 1 percent of the deal’s valueincluding net debt and compares with the 2 percent to 3 percentthat is typical of these deals, said Elizabeth Nowicki, aprofessor at Tulane University Law School.

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