On Saturday, Reuters said that Vice Chairman Greg Abel, who is next in line to succeed billionaire Warren Buffett as chief executive, sold his 1% stake in the Berkshire Hathaway Energy unit for $870 million.
Berkshire said the energy unit bought out Abel in June under an agreement between them and the family of the late billionaire philanthropist Walter Scott, which owns an 8% stake in the company.
Buffett's Omaha, Nebraska-based conglomerate took a $362 million charge to capital, reflecting the premium over how much the stake's value was reflected in its books.
Berkshire now owns 92% of Berkshire Hathaway Energy, whose businesses include energy, utility and pipeline operations and a large U.S. real estate brokerage.
Scott, a Nebraska native, was a longtime Berkshire director and Buffett friend who died in September at the age of 90.
Abel's sale suggests that the Scott family's stake could be worth $7 billion. Berkshire ended up with more than $105 billion of cash at the end of June.
"I suspect that if Abel is selling, Walter Scott'sScott's estate could be liquidated," James Shanahan, Edward Jones Co analyst said.
Cathy Seifert, CFRA Research analyst, said it was a little surprising there wasn't an earlier regulatory filing for such a significant transaction. Scott's family couldn't be reached for comment. Berkshire Hathaway Energy didn't respond immediately to a request for comment.
Abel, 60, a hockey fan who grew up in Edmonton, Alberta, joined Berkshire Hathaway Energy, then known as MidAmerican Energy, in 1992, eight years before Berkshire took over.
In 2008 he became MidAmerican's chief, and Berkshire's vice chairman overseeing its dozens of non-insurance businesses in 2018.
In May 2021 he said that if he stepped down, Abel would become Berkshire's chief executive.
Abel and Ajit Jain, a Berkshire vice chairman who oversees its insurance businesses, were each paid $19 million in each of the last three years. Buffett sets their compensation.
Shanahan said that Abel's sale makes me wonder if he will buy Berkshire stock. He doesn't own very much, and might use the proceeds to have more skin in the game.