Biz people

Buffett may buy into Bear Stearns

Bear Stearns Cos may be close to selling a stake to Warren Buffett or a financial institution as the beleaguered securities firm struggles to revive earnings and its stock price.

Buffett (below), the 77-year-old billionaire chairman of Berkshire Hathaway Inc, contacted Bear Stearns Chief Executive Officer James "Jimmy" Cayne, 73, a month ago, the New York Times reported yesterday in its online edition, citing unidentified people. Bear Stearns shares rose 7.7 percent on the report.

An investment by Buffett could be "great" because it "puts his reputation behind Bear and strengthens it", said Erin Archer, an analyst at Thrivent Financial for Lutherans in Minneapolis, which manages $75 billion and holds Bear Stearns shares. "It could bolster the balance sheet and perception" of the firm.

Officials at Bear Stearns, Berkshire Hathaway, Bank of America and Wachovia declined to comment.

Billionaire Joseph Lewis, the British-born, Bahamas-based currency trader, paid $860 million for a 7 percent stake in Bear Stearns before the company reported a 61 percent decline in third-quarter earnings.

Buffett contacted Cayne last month when the stock approached $100, the Times reported, adding that Bear Stearns executives are no longer insisting that a buyer pay a 40 percent premium for a stake in the company.

Buffett bought 12 percent of New York-based Salomon Brothers in 1987 to protect the securities firm against a takeover by corporate raider Ronald O. Perelman.

"It's a good thing any time Warren Buffett buys a piece of a company or is thinking of it," said Joseph Saluzzi, co-head of equity trading at Themis Trading LLC in Chatham, New Jersey.

Mallya snaps up Epic stake

Indian billionaire Vijay Mallya has bought a "significant" stake in US-based Epic Aircraft and may help expand sales of its aircraft into other markets.

Mallya (right), chairman of the Bangalore-based UB Group and Kingfisher Airlines Ltd, bought a strategic stake in Epic Aircraft, the companies said in a joint statement, without giving more details.

"Mallya now has a significant interest in our company, and we will immediately benefit from his relationships with a variety of companies, including Airbus and Pratt & Whitney," Rick Schrameck, chief executive officer of Epic Aircraft, said in the statement.

Epic is testing its Dynasty model, a 1,200-horsepower single-engine turboprop.

(China Daily 09/28/2007 page15)