Southwest acknowledges Berkshire Hathaway takeover rumours

Aviation

Southwest Airlines has acknowledged speculation that Berkshire Hathaway – already one of Southwest’s largest investors – has interest in acquiring the carrier.

Though such speculation has arisen before, renewed suggestions that Berkshire and its chief executive Warren Buffett might target for Southwest for a takeover surfaced on 28 February.

“There has been speculation circulating that Warren Buffet might be looking to acquire an airline for some time, and that Southwest might be a good fit,” Southwest says in a statement. “As a policy, we do not comment on speculations but appreciate Berkshire’s continued support of Southwest Airlines.”

Citing regulatory filings, Southwest adds that Berkshire Hathaway is Southwest’s second-largest shareholder.

Berkshire Hathaway owned 47.8 million Southwest shares – 8.7% of Southwest’s total shares – at the end of 2018, according to Berkshire Hathaway’s most-recent letter to shareholders.

Twitter posts fuelled the most recent speculation, and Southwest’s stock price jumped about 5% on 28 February, closing the day up 4% at $56.04.

Berkshire Hathaway did not immediately respond to a request for comment.

Southwest’s most recent proxy statement says that in February 2018 California-based Primecap Management Company held the largest chunk of its shares, or 12%.