Warren Buffet’s Berkshire Hathaway Inc., which holds the largest share in DaVita HealthCare Partners Inc., said it agreed not to acquire more than 25 percent of the dialysis provider after it raised the likeliness of increasing its stake of the company.
The agreement, commonly named a “standstill agreement” was disclosed on Tuesday in a regulatory filing by DaVita.
In a conference call yesterday, Denver-based DaVita’s Chief Legal Officer, Kim Rivera said that Berkshire approached the dialysis company about increasing its stake, in a response to a question about what brought up the deal.
Berkshire Hathaway held around 15 million shares of the dialysis company, a share of about 14 percent. Standstill agreements are typically arranged by target companies to prevent an unsolicited takeover later on.
The companies reached an agreement “that reflects the fact that they’re a passive investor and this is a friendly relationship,” Rivera said.
Berkshire’s DaVita holding is valued at more than $1.7 billion based on the closing price of $117.56 yesterday. Berkshire’s initial holding was acquired at about $74 a share in 2011, according to data filed with insurance regulators. DaVita climbed 3.3 percent to $121.41 in extended trading yesterday after the agreement was disclosed.
The accord was signed by DaVita President Javier Rodriguez and Ted Weschler, the 51-year-old stock picker Buffett hired to help oversee investments. DaVita was among the largest holdings at Weschler’s hedge fund before he joined Omaha, Nebraska-based Berkshire.
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