The rails are diverging in the Berkshire Hathaway planned acquisition of Burlington Northern. While antitrust clearance was granted and a Berkshire shareholder meeting remains on track, legal challenges are gaining steam.
OMAHA, Neb. ( TheStreet) -- Berkshire Hathaway ( BRK.B) has cleared one hurdle in its planned acquisition of Burlington Northern ( BNI): the Federal Trade Commission said this morning that it's granted antitrust approval for the acquisition. Berkshire, which has steadily increased its stake in Burlington since its first significant purchase of the railroad stock in April 2007, is planning to acquire the 77.4% of Burlington Northern it does not already own for $26.4 billion. The stocks were virtually unchanged on Monday morning trading, with both Berkshire and Burlington up approximately 0.5%.
Berkshire announced last week that it will hold on Jan. 20 the shareholder meeting to vote on the 50-1 stock split that is being recommended as part of the acquisition. Set against the full-speed-ahead nature of the antitrust clearance and shareholder meeting, legal battles over the deal's value are heating up, according to the Fort Worth Star-Telegram. Lawyers in Texas and Delaware are expected to merge lawsuits into one class-action suit arguing that the $100 per share that Berkshire has agreed to pay for Burlington stock -- a 31% premium -- is a lowball offer. The lawyers are aiming for what the courts call a case on a contingency basis, which is intended to force Berkshire to pay significantly more for the rail operator either through a jury verdict or settlement.