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After accumulating slightly over 5% of Washington Post’s shares in late spring 1973 Buffett wrote to Katherine Graham saying he would like to buy more. She was terrified that a raider would take the company out of family hands or influence it for political purposes, and so she did not received this letter from Omaha with much affection.
While the warmth that Warren put in the letter, with its focus on praising quality journalism and his long admiration for the Washington Post since childhood, helped calm her down a little, she was still afraid.
Katherine Graham was told by friends and advisors that, logically, there was no way she could lose control of the company no matter how many shares Berkshire Hathaway bought, because the publically traded B shares had so little voting power. The best that a buyer could hope for, even if they bought a majority of the B’s was to get just one seat on the board. She controlled all the A shares.
He won her round
She agreed to meet Buffett. It wasn’t long before his intelligence, decency and humour won her over. At a second meeting, in the autumn, Buffett made it plain that takeover was not an option. He charmed her and they became life-long friends.
Berkshire Hathaway bought 467,150 shares of Washington Post “B” stock at a cost of $10.6 million. (The shares were shortly afterwards split to be 934,300 shares. In 1979 they were split again to become 1,868,000 shares, then reduced slightly by buy-backs). Overall, there………….To read the rest of this article, and more like it, subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1
