Warren Buffett buys into Liberty Global

US investor Warren Buffett’s investment vehicle Berkshire Hathaway has acquired a stake in Liberty Global, a regulatory filing has revealed.

According to Berkshire Hathaway’s fourth quarter 13F filing, Buffett’s investment company acquired about 2.95 million shares valued at that time at US$262 million.

At the same time, Berkshire revealed that it had reduced its stake in John Malone’s domestic US media group, Liberty Media, by 322,000 shares and had pulled out of a stake in US pay TV provider Dish Network.

Analysts believe that Liberty Global is an attractive stock to Buffett for a number of reasons. These include expectations that its earnings will grow rapidly over the next two years and the fact that there is a wide gap between its current market capitalisation of about US$33 billion and its ‘enterprise value’ (market cap plus debt, minority interests and preferred shares minus total cash and cash equivalents), which is seen as a better measure of the theoretical takeover price of a company. In Liberty’s case the enterprise value stands at about US$75 billion.