Categories
Todd Combs and Ted Weschler

Berkshire Hathaway Benefits From Cable TV Frenzy

(BRK.A), (BRK.B)

Charter Communications’ agreement to acquire cable operator Time Warner Cable has the cash register ringing at Berkshire Hathaway as well.

Shares of cable operator Liberty Global PLC, with annual revenues of $18.2 billion, has soared as the quickly consolidating cable industry has drawn interest from large Wall Street hedge funds.

Berkshire’s not sitting on the sidelines, as its stake in Liberty Global stood at 10,342,793 shares as of March 31, 2015, making Berkshire the 5th largest institutional holder of the company.

As the battle for Time Warner Cable has heated up over the last year, Liberty Global stock has risen a dramatic 29% over the past 12 months, and 16.2% year-to-date.

Berkshire first disclosed a stake in the international cable TV operator in December 2014, when it announced it owned 2.95 million shares of the company. As of March 31, 2015, Berkshire has trimmed its position by some 473,531 shares.

An International Cable TV Power House Eying Acquisitions

Helmed by cable TV mogul John C. Malone, Liberty Global is the largest international cable company and serves 14 countries, including 12 in Europe, and it’s clearly looking for even more customers and reach.

Malone, who is also the Chairman of Liberty Media Corporation and Liberty Interactive Corporation, and a member of the Board of Directors of Charter Communications, is known as one of the most aggressive dealmakers in a field known for deal making. Malone holds a 26% in Charter Communications through Liberty Broadband.

Is Vodafone Next?

Recently, Malone has expressed interest in British telecommunications company Vodafone Group, suggesting it would be a “good fit” with Liberty Global. As cable operators seek to expand their spheres of operation in the face of growing competition from non-cable Internet services, such as Netflix and Hulu, Malone just might be right that Vodafone’s 400 million customers across the globe are just what Liberty Global needs, and Berkshire could be along for a nice ride.

© 2015 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.