Berkshire buys $1.2 billion in stock from single investor

Warren Buffett's conglomerate Berkshire Hathaway Inc bought back $1.2 billion in stock from the estate of an unnamed investor, the company said on Wednesday, one day after Buffett advocated for a higher estate tax when the wealthy die.

Berkshire also raised the threshold for future share buybacks to 120 percent of book value from 110 percent - the level it chose when it first approved a repurchase program in September 2011.

The anonymous purchase was done at $131,000, or 117 percent of book value. Berkshire shares have closed above, or within $1,000 of, that mark every trading day since November 19.

Berkshire said it bought 9,200 Class A shares from "the estate of a long-time shareholder," whom it did not name. Buffett's assistant did not immediately respond to a request for comment on the shareholder's identity. The shares represent 1 percent of Berkshire's Class A stock.

Buffett was always loathe to offer share buybacks and consented to it last year only after Berkshire hit historically low valuations. In its most recent quarterly filing, Berkshire said it had not made any repurchases in the first nine months of 2012, after spending just $67.5 million on buybacks in 2011.

"I don't expect a significant repurchase program to be announced as (Buffett) is clear that he is in acquisition mode," said Michael Yoshikami, founder and CEO of Destination Wealth Management and a long-time Berkshire investor.

Berkshire's Class A shares rose after its announcement, up 2.8 percent at $134,500.

Based on the company's book value at the end of the third quarter, the buyback threshold would stand for now at $134,061.60. The stock has traded below that level for most of this quarter.

DEATH AND TAXES

The repurchase came less than a month ahead of the looming "fiscal cliff," automatic tax hikes and spending cuts set for January 1 that the White House and members of Congress have been negotiating to avoid.

Among other levies, the estate tax is expected to rise in the new year package by as much as 20 percentage points, which may have spurred the anonymous shareholder to sell now.

Buffett himself was one of the signers of an open letter released on Tuesday that called for a lower starting point for the tax and a higher taxation rate, beginning at 45 percent.

"We believe it is right to have a significant tax on large estates when they are passed on to the next generation. We believe it is right morally and economically, and that an estate tax promotes democracy by slowing the concentration of wealth and power," the 33 signers wrote in the letter released by the campaign, United for a Fair Economy.

Buffett has been publicly campaigning for more than a year for higher taxes on the wealthy, even lending his name to a proposal called the "Buffett Rule" that failed in Congress.

(Editing by Gerald E. McCormick, Nick Zieminski, Jeffrey Benkoe and David Gregorio)