Berkshire Hathaway repurchases $1.2 billion worth stock

Berkshire Hathaway Inc has repurchased $1.2 billion in stock, clearing the decks for more buybacks as chief executive Warren Buffett consolidated a programme that would help his successor return capital to shareholders.

The Omaha-based company said in a statement this week  that it had raised the threshold for the buy back of stock to 120 per cent of book value from 110 per cent.

According to the firm it repurchased 9,200 Class A shares for $131,000 each from the estate of a longtime shareholder who was not identified.

Buffett, 82, and Berkshire vice chairman Charles Munger, 88, have been grooming a new generation of leaders at the firm. The duo took over Berkshire from a failing textile maker and turned it into $223 billion company that has interests in insurance, freight, power generation and retail and manufacturing businesses. Buffett had held back share buybacks for four decades before changing course.

The buyback comes companies are increasingly  returning cash to shareholders through various moves, including raised dividends, one-time dividend payouts and share repurchases.

While Moody's raised its dividend by 25 per cent earlier this month, online travel company Expedia approved a special cash dividend.

Class A shares of Berkshire, were up 2.46 per cent in recent trading to $134,047. The stock had rallied almost 17 per cent so far this year.