Berkshire buys Burlington Northern stock options

NEW YORK (Reuters) - Warren Buffett's Berkshire Hathaway Inc (BRKa.N) (BRKb.N) said it has acquired options to boost its stake in Burlington Northern Santa Fe Corp (BNI.N), the No. 2 U.S. railroad, to 17.1 percent from 15 percent.

In a filing with the U.S. Securities and Exchange Commission late on Tuesday, Berkshire said its National Indemnity Co. unit on August 30 and 31 acquired call options to buy 7.46 million Burlington Northern shares for $40 each. The shares have traded between $73.89 and $85.67 over the last month.

The options are exercisable on October 3, but Berkshire may extend this date to November 2 for an additional 21.5 cents per option, the filing shows.

Berkshire said it already owns 52.98 million Burlington Northern shares, making it the Fort Worth, Texas-based company's largest shareholder. It told Burlington Northern on August 28 that it might seek to boost its stake to 25 percent, according to an August 31 SEC filing.

Buffett told shareholders at Omaha, Nebraska-based Berkshire's annual meeting in May that the railroad business's competitive prospects have improved and are better than they were 30 years ago.

Berkshire in May reported stakes in two other railroad companies: 6.36 million shares of Norfolk Southern Corp (NSC.N) and 10.51 million shares of Union Pacific Corp (UNP.N). On August 14, it said it filed confidential information with the SEC about the status of its holdings.

In its 2006 annual report, Berkshire disclosed stock ownership stakes exceeding 15 percent as of December 31 in four publicly-traded companies: credit rating provider Moody's Corp (MCO.N), building materials maker USG Corp (USG.N), publisher Washington Post Co (WPO.N) and White Mountains Insurance Group Ltd (WTM.N).

Burlington Northern shares rose 2 cents to $82.92 in morning trading on the New York Stock Exchange.

(Reporting by Jonathan Stempel)