A Berkshire Hathaway unit will pay $5.6 billion for NV Energy, the electric utility serving Las Vegas and its power-hungry casinos, in yet another large energy deal for Warren Buffett in the western United States.
Berkshire's MidAmerican Energy Holdings Co said on Wednesday it will buy NV Energy for $23.75 per share, a 23 percent premium to NV's Wednesday closing price. NV Energy shares rose to $23.90 in after-hours trading on Wednesday.
It is not uncommon for shares in Buffett's target companies to trade slightly above the offer price, even where there are no competing bids and Buffett has said explicitly the offer is his best and final one.
"Berkshire has a lot of cash earning very little. If this is a $5.6 billion cash deal, then Berkshire turns low-yielding cash into $330 million of earnings," said Steve Check, president of Check Capital Management, an investment advisory firm, referring to NV Energy's earnings over the last 12 months.