Billionaires: Warren Buffett’s Berkshire Hathaway reveals $6.7bn stake in insurer Chubb

In our fortnightly round-up of the world’s ultra-wealthy, Frank McCourt seeks to put together a consortium to buy TikTok and Royal Mail Owner receives higher $4.4bn bid from Daniel Kretinsky

Warren Buffett’s Berkshire Hathaway is deeply familiar with the insurance industry, owning a range of companies. AP

Warren Buffett’s Berkshire Hathaway unveiled a $6.7 billion stake in insurer Chubb, ending months of suspense over its position in a financial firm, previously kept concealed in regulatory filings.

Berkshire disclosed the holding in a filing on May 15, reflecting its positions at the end of the first quarter.

The conglomerate has been building the stake since last year but it hadn’t previously been reported because the Securities and Exchange Commission allowed Berkshire to keep it confidential.

Separate quarterly filings reflected that Berkshire’s equity stakes in banks, insurance and finance companies were growing, while the company was pulling back in other industries, including consumer products.

Mr Buffett’s Berkshire is deeply familiar with the insurance industry, owning a range of companies including Geico and National Indemnity.

The billionaire investor has called Berkshire’s property-casualty insurance operation the “core” of the conglomerate, helping generate “float” that can then be reinvested.

The conglomerate has also invested in other businesses in the insurance industry. Berkshire owns a stake in Aon, a major broker, and has previously backed rivals including Marsh & McLennan.

Chubb is one of the biggest property-casualty insurers in the US and operates in 54 countries.

The company insured Baltimore’s Francis Scott Key Bridge, which collapsed when a cargo ship crashed into it in late March. It’s reportedly set to pay out $350 million to the state of Maryland.

Mr Buffett already revealed a few recent changes to his company’s holdings at Berkshire’s annual meeting in Omaha earlier this month.

It trimmed a stake in Apple to $135.4 billion at the end of the first quarter, as the iPhone maker faces a range of struggles including an antitrust fine, sliding sales in China and a failed car project.

The billionaire investor praised the tech company at the meeting and said it will remain Berkshire’s largest investment barring any dramatic changes.

The cash pile at Berkshire reached a record $189 billion at the end of March.

Mr Buffett said at the annual meeting that it was “a fair assumption” that it will hit $200 billion by the end of this quarter.

Frank McCourt

Billionaire businessman and real estate mogul Frank McCourt said that he’s putting together a consortium to purchase TikTok’s US business, adding to several investors hoping to benefit from a new federal law that requires TikTok’s China-based parent company to sell the popular platform or face a ban.

Mr McCourt is organising the bid in consultation with the investment bank Guggenheim Securities and “with the goal of placing people and data empowerment at the centre of the platform’s design and purpose”, according to an announcement on the website of his Project Liberty initiative.

If a sale occurs, the former owner of the Los Angeles Dodgers said he would plan to restructure TikTok and give more agency to people “over their digital identities and data” by migrating the platform to an open-source protocol that allows for more transparency.

Mr McCourt said he doesn’t use TikTok, but his businesses and Internet-focused initiative do.

The bid is an extension of his long-running interest in remaking the Internet with better data privacy protections, an effort he’s focused on through Project Liberty.

So far, his vision to remake TikTok has received the backing of Jonathan Haidt, a well-known social psychologist.

“We thought this was a really fantastic opportunity to accelerate the creation of an alternative Internet,” Mr McCourt said.

Other investors, including former Treasury Secretary Steven Mnuchin, have expressed a desire to purchase TikTok.

However, parent company ByteDance has already said it does not plan to sell the platform.

Some experts have also noted the Chinese government is also unlikely to approve a sale – especially not one that includes the recommendation engine that powers the videos that populate users’ feeds.

Mr McCourt said he's not interested in TikTok's current algorithm because “top-down” recommendation engines conflict with his view of how such platforms should be managed.

He also thinks ByteDance will sell TikTok’s US business at some point.

For now, though, the company has been fighting back against the law passed last month, which would disrupt one of its most lucrative markets.

ByteDance and TikTok recently filed a lawsuit against the US government to block the law from going into effect.

The company also has been waging a legal battle in Montana to block a state law that would ban the video-sharing platform.

Mr McCourt is worth $1.4 billion, according to Forbes. He sold the Dodgers for $2 billion in 2012 to Guggenheim Baseball Management. In 2016, he bought the French football club Marseille.

Daniel Kretinsky

The owner of Britain’s Royal Mail is inclined to accept a £3.5 billion ($4.4 billion) non-binding bid from Czech billionaire Daniel Kretinsky as it struggles to modernise the beleaguered postal service.

Parent company International Distributions Services said the board has indicated to Mr Kretinsky’s EP Group that it would probably recommend an offer at the 370 pence per share value proposed.

That’s after strongly rejecting its previous offer and promising higher profits from the planned liberalisation of postal regulations.

EP Group previously made a non-binding proposal of 320 pence per share that was rejected by the board, which said it undervalued the business, partly because it didn’t consider any issues from changes to British rules over letter delivery.

After the first offer was rejected, EP said private investment was crucial for Royal Mail, which has struggled to cope with changing delivery trends.

Mr Kretinsky has been building his stake in the company over the past few years and now owns more than 27 per cent of the business.

Mr Kretinsky’s latest offer is 360 pence in cash, a 2 pence per share final dividend and an 8 pence a share special dividend to be paid when the deal completes.

Royal Mail is grappling with a decline in letter writing and a rise in parcel deliveries due to e-commerce.

Members of the Communication Workers Union voted to accept a new pay deal last year after months of strikes, during which it accused management of prioritising parcels over letters.

The company has also pushed for the government to relax rules that force it to deliver letters on Saturdays, which it has said is unsustainable. This was rejected by the government last year.

In recent years, Mr Kretinsky – known as “the Czech Sphinx” for his inscrutable approach to investing – has been diversifying away from the energy industry and has quickly built up a portfolio of assets across Europe.

In Britain, he has stakes in grocer J Sainsbury and Premier League football club West Ham United.

In France, Mr Kretinsky’s consortium has taken control of grocer Casino Guichard Perrachon, alongside media investments.

A bid for the former state-owned business could face opposition from some UK politicians who have previously voiced concerns about the stake that Mr Kretinsky already owns.

EP Group has agreed to offer undertakings to “protect key public interest factors and recognise Royal Mail’s status as a key part of national infrastructure”, IDS said. These include continuing to send first-class letters six days a week.

The deadline to make the bid official has been extended to May 29.

Jim Ratcliffe

British billionaire Jim Ratcliffe, who recently bought a minority stake in Premier League team Manchester United, has seen his wealth decline as the chemicals conglomerate behind his fortune stumbles.

Mr Ratcliffe’s net worth has sunk 11 per cent this year to about $17 billion, dragged down by one of the largest units of his Ineos conglomerate, which recently reported its lowest annual earnings since 2020 and highest net debt for at least a decade.

He’s now the world’s 118th-richest person, according to the Bloomberg Billionaires Index, 19 spots lower than at the start of the year. The 71-year-old is also the UK’s second-richest person.

Mr Ratcliffe’s wealth is dropping as he makes his boldest attempts yet to diversify the closely held business he’s run for more than two decades.

Earlier this year, he spent at least $1.5 billion to acquire about a 28 per cent stake in Manchester United.

Meanwhile, Ineos Group Holdings, the London-based conglomerate’s largest chemical unit, grappled last year with weakening demand for its products and rising borrowing costs from its largely floating-rate debt.

The company last month reported a first-quarter loss of about €190 million ($205 million) amid a 361 per cent jump in financing costs from a year earlier.

Another major chemicals unit, Ineos Quattro Holdings, swung to its first loss in five years, filings for last year show.

Mr Ratcliffe pushed into sports acquisitions as he was also expanding Ineos, partly to help bolster awareness of the London-based company, which doesn’t report consolidated financials.

He purchased Swiss football team Lausanne for an undisclosed sum in 2017, the same year Ineos acquired UK clothing brand Belstaff and announced plans to build an off-road vehicle to rival Tata Motors’ Land Rover.

Ineos has since struck deals to partner with five-time Olympic medallist Ben Ainslie to build a British sailing team for the America’s Cup, while also acquiring French Ligue 1 football club OGC Nice and former Tour de France winner Team Sky.

The Manchester United deal took more than a year to complete and gave Mr Ratcliffe control of football operations even though he acquired only a minority stake.

He’s since sought to rein in costs, including cancelling corporate credit cards for senior executives, according to the Times of London.

Mr Ratcliffe’s wealth drop is unlikely to affect Manchester United. Still, any prolonged slump in his fortunes would constrain his efforts to invest further after already committing to allocate an extra $100 million by year-end to support the club’s complexes.

Mr Ratcliffe, who grew up in Manchester but now lives in Monaco, founded Ineos in 1998.

He gained a reputation for spotting undervalued assets while turning the company into a global chemicals firm that now includes shipping and energy businesses.

Mr Ratcliffe still oversees the group along with John Reece, 67, and Andy Currie, 68. They’re each worth about $6 billion from their roughly 19 per cent stakes, with Mr Ratcliffe owning the balance, according to Bloomberg’s index, which calculates the company’s value based on a five-year average of Ineos Group Holdings’ financials to account for the chemical industry’s volatile business cycles.

Compiled from Bloomberg and AP