Investor Gets OK to Purchase Up to 22% of PS Group Stock
Warren Buffett, regarded as one of the nation’s savviest investors, has received permission from PS Group to acquire up to 22% of the San Diego-based company’s stock, PS Group said Monday. Buffett, through Omaha-based Berkshire Hathaway, already owns 11% of PS Group, the former holding company of Pacific Southwest Airlines.
PS Group’s board of directors, at Buffett’s request, recently modified a shareholder-rights package to clear the way for the proposed stock purchase by Berkshire Hathaway. Most of PS Group’s stock is in the hands of a few large holders, and the company has not determined if Berkshire Hathaway has reached an agreement to purchase stock from one of those shareholders, PS Group Vice President Lawrence A. Guske said Monday.
Berkshire Hathaway, an Omaha-based investment company that is 41% owned by Buffett, owns a 17% interest in Capital Cities/ABC; a 45% interest in GEICO, an insurance company; and an 8% interest in Gillette, the personal products company.
In a filing with federal regulators earlier this year, Buffett described the PS Group stock purchase as an investment.
PS Group’s stock closed up $2.25 on Monday at $36.25, largely because of Buffett’s continued interest in the company, according to Irving Katz, director of research for Thomas Green/San Diego Securities. PS Group’s stock rose by $1.875 to $36.625 in May after Buffett announced in regulatory filings that he had acquired 11% of the company’s stock, Katz said.
PS Group adopted the shareholder-rights package in 1986 “to ensure that our board of directors could review any large accumulation of PS Group’s stock to thwart any action adverse to all of PS Group’s shareholders,” PS Group President and Chief Executive George Shortley said in a prepared statement released on Monday.
“The plan had its desired effect by permitting the board to review Buffett’s proposed accumulation of more than 20% of the company’s stock.”
PS Group’s board of directors believes that Buffett’s continued interest in PS Group is a “positive and welcome development,” Shortley said. The company views Buffett as “a very constructive long-term investor . . . Buffett’s increased ownership (plan) is a validation of PS Group’s long-term strategic plan,” Shortley said.
PS Group’s main businesses include aircraft leasing and a majority interest in USTravel Systems, a travel agency business. The company also has interests in fuel distribution and gas and oil exploration. The company has a 71% interest in Recontek, a company that hopes to open its first hazardous waste-treatment facility later this year in Newman, Ill.
