ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, May 9, 1996 TAG: 9605090061
SECTION: BUSINESS PAGE: 7 EDITION: METRO
DATELINE: NEW YORK
SOURCE: Associated Press
Warren Buffett, the consummate buy-and-hold investor, is selling.
After years of waiting for his $358 million investment in USAir Group Inc. to make money for Buffett's investment company, Berkshire Hathaway Inc., the billionaire is uncharacteristically giving up.
Buffett wants USAir to buy back his 10 percent stake in the airline. Berkshire, which estimated recently that its $358 million 1989 investment in the airline lost about $143 million of its value, said it would try to find other buyers if USAir didn't take its offer.
Buffett suffered a loss as USAir struggled with low-fare competition and a string of crashes.
USAir's common stock was trading for about $50 per share when Buffett bought a special class of preferred shares. It dropped to a $4-per-share low in 1994 and has since quadrupled from its lows.
Buffett has been distancing his investment company from USAir for more than a year and has already reduced the USAir stake on Berkshire's books. USAir stock was off 50 cents Wednesday on the New York Stock Exchange at $16.621/2 per share.
A spokeswoman for Berkshire Hathaway said Wednesday that the company had no comment. Berkshire's high-priced stock was down more than 4 percent at $33,400 per share on the New York Stock Exchange.
Peter A. Russ, an analyst at Shelby Cullom Davis, said the move wasn't significant for Berkshire.
Because Berkshire has already reduced the value of the USAir stock on its books, ``If he gets more than $215 million, it produces a gain for Berkshire, and I would guess he will,'' Russ said.
Buffett is known for holding on to stock. One of his favorite phrases is, ``Our holding period is forever,'' said Andrew Kilpatrick, whose biography of Buffett is titled: ``Of Permanent Value.''
Buffett, who controlled 10.5 percent of USAir stock, has made no bones about his unhappiness with it. He and vice chairman Charles Munger resigned from USAir's board last year because the airline failed to win cost-saving agreements from its unions. In 1994, USAir stopped paying dividends to preferred shareholders.
USAir spokesman Rick Weintraub declined immediate comment on Berkshire's plans.
The Arlington, Va.-based USAir, the nation's sixth-largest airline in terms of traffic, returned to profitability last year after years of losses and a streak of crashes that undermined passengers' confidence.
LENGTH: Medium: 54 linesby CNB