On March 14, the companies announced that Berkshire Hathaway would acquire100 percent of Lubrizols shares for $135 per share. After the close of the $9.7 billion transaction, Lubrizol will operate as a subsidiary of Berkshire Hathaway.
Buffett detailed Sokols resignation in a March 30 statement. Sokol was chairman of several Berkshire subsidiaries. Buffett credited Sokol with bringing to him the idea for purchasing Lubrizol on Jan. 14 or 15.
Initially, I was unimpressed, but after his report of a January 25 talk with its CEO, James Hambrick, I quickly warmed to the idea, Buffett stated. Though the offer to purchase was entirely my decision, supported by Berkshires board on March 13, it would not have occurred without Daves early efforts.
According to Buffett, Sokol mentioned in the first talk about Lubrizol that he owned stock in the company. Before leaving for Asia on March 19, Buffet said, he learned Sokol first purchased 2,300 shares of Lubrizol on Dec. 14 (closed at $108.03), and then sold those on Dec. 21 (closed at $109.28). Subsequently on Jan. 5, 6 and 7 (closed at $103.55, $102.16 and $103.28, respectively), Sokol bought 96,060 Lubrizol shares pursuant to a 100,000-share order he had placed with a $104 per share limit price. A limit order sets the maximum or minimum at which one is willing to buy or sell a particular stock.
At $135 per share, Lubrizol stock that Sokol purchased for $9.9 million is worth almost $13 million.
Neither Dave nor I feel his Lubrizol purchases were in anyway way unlawful, Buffett said. He has told me that they were not a factor in his decision to resign. Buffett received Sokols resignation on March 28 and has declined to comment further.
Referring to Berkshires announcement, Lubrizol Chairman, President and CEO James Hambrick told employees in a letter Thursday that, the matters discussed in that press release do not in any way alter the terms or the timing of our proposed transaction with Berkshire Hathaway. We are continuing to work with Berkshire Hathaway to complete the merger as quickly as possible. Hambrick said Lubrizol continues to expect to complete the merger in the third quarter of 2011.