Occidental Gets a Break With Buffett Stake, Icahn Court Defeat

(Bloomberg) -- Occidental Petroleum Corp. rose after Warren Buffett’s Berkshire Hathaway Inc. bought an additional stake in the debt-laden oil producer and a Delaware judge ruled against activist investor Carl Icahn’s request for company files.

Occidental gained as much as 4.2% Friday after Berkshire disclosed the purchase of $332 million of shares in the third quarter. That makes it the 17th-largest investor in Occidental, according to data compiled by Bloomberg.

The stock is in addition to the $10 billion of preferred shares Buffett bought earlier in 2019 to help Occidental fund its takeover of Anadarko Petroleum Corp.

The vote of confidence from Buffett is “certainly a positive for the stock,” said Muhammed Ghulam, a Houston-based analyst at Raymond James & Associates. “I wouldn’t be surprised if he buys more if the price drops lower.”

Occidental dropped to a 14-year low earlier this month after Chief Executive Officer Vicki Hollub unveiled a plan to slash capital spending by 40% to deal with the debt taken on in its $37 billion takeover of Anadarko.

Icahn has said the takeover, which was completed in August, was flawed. He plans a proxy battle to change Occidental’s board next year. But the billionaire investor lost a ruling that would have required Occidental to hand over company files related to the deal that may have assisted him in his fight. Icahn plans to appeal the decision.

Occidental traded 2.8% higher at $38.83 a share at 10:29 a.m. in New York.

To contact the reporter on this story: Kevin Crowley in Houston at kcrowley1@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net

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