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No. of Recommendations: 7
They could simplify their life by just giving the Gates Foundation $3.8 billion in cash, and cancelling the equivalent number of shares.

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Donating cash instead of shares would result in a huge capital gains tax bill for Buffett.



Of course, you are right.


Plus Gates being a board member and a close business associate, I believe Buffett would prefer to keep it an “arms length” deal.

Fine, keep it at arm's length. Anyone wanting to sell their shares can get market price from Berkshire by selling a block. 'Anyone' can include the Gates Foundation, of course, in fact, to be neutral, would HAVE to include the Gates Foundation.


He could always announce a reverse dutch auction tender for a certain number of shares in a price range. If this fails because share price goes above range, then shares would at least trade closer to intrinsic value.



Yes, the Dutch auction would do the job too. Berkshire could do one every 3 months for $5b (or whatever amount he is prepared to part with), setting a maximum (reserve) price where he is comfortable he is not overpaying. The GF could participate if they wanted to. There would be no reason not for them not to participate, I would think, since they presumably have the same problem Buffett has, except that they are desperately trying not to DEPRESS the share price with their share SALES. Hmmm... these two were made for each other! Win-win-win, counting us ongoing shareholders as the third win!

But something tells me that Buffett already knows all this...

dt
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