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Berkshire Hathaway to Exercise Warrants to Acquire White Mountains Common Shares

May 26, 2004 at 4:47 PM EDT

HAMILTON, Bermuda, May 26 /PRNewswire-FirstCall/-- White Mountains today announced that Berkshire Hathaway Inc. (NYSE: BRKa) has agreed to exercise all of its warrants to purchase common shares of White Mountains. Upon exercise, the Company will receive approximately $294 million in cash and Berkshire Hathaway will hold 1,724,200 common shares, or approximately 16%, of the outstanding common shares of the Company. The exercise is subject to the expiration or termination of the Hart-Scott-Rodino waiting period.

President and CEO Ray Barrette said, "We are pleased that Warren Buffett has agreed to exercise the warrants a year ahead of schedule for a modest discount. This is a strong endorsement of the progress we have made since the OneBeacon acquisition in June 2001. We see many opportunities to put this capital to work for the benefit of all shareholders."

Berkshire Hathaway bought the warrants in connection with the financing of White Mountains' acquisition of OneBeacon in 2001. The warrants were exercisable at any time until May 2008 and callable by the Company on or after May 31, 2005. Berkshire Hathaway and the Company agreed to reduce the exercise price by approximately 2%. As a result of the discount, the exercise of the warrants will have a small impact on fully converted tangible book value per share.


White Mountains is a Bermuda-domiciled financial services holding company traded on the New York Stock Exchange and the Bermuda Stock Exchange under the symbol WTM. Additional financial information and other items of interest are available at the Company's web site located at

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This press release may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included or referenced in this release which address activities, events or developments which we expect or anticipate will or may occur in the future are forward-looking statements. The words "believe," "intend," "expect," "anticipate," "project," "estimate," "predict" and similar expressions are also intended to identify forward-looking statements. These forward-looking statements include, among others, statements with respect to White Mountains':

    -- growth in book value per share or return on equity;
    -- business strategy;
    -- financial and operating targets or plans;
    -- incurred losses and the adequacy of its loss and loss adjustment
       expense reserves;
    -- projections of revenues, income (or loss), earnings (or loss) per
       share, dividends, market share or other financial forecasts;
    -- expansion and growth of its business and operations; and
       future capital expenditures.

These statements are based on certain assumptions and analyses made by White Mountains in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors believed to be appropriate in the circumstances. However, whether actual results and developments will conform with its expectations and predictions is subject to a number of risks and uncertainties that could cause actual results to differ materially from expectations, including:

    -- the failure of announced acquisitions to enhance shareholder value;
    -- claims arising from catastrophic events, such as hurricanes,
       earthquakes, floods or terrorist attacks;
    -- the continued availability of capital and financing;
    -- general economic, market or business conditions;
    -- business opportunities (or lack thereof) that may be presented to it
       and pursued;
    -- competitive forces, including the conduct of other insurers and
    -- changes in domestic or foreign laws or regulations applicable to White
       Mountains, its competitors or its  clients;
    -- an economic downturn or other economic conditions adversely affecting
       its financial position;
    -- loss reserves established subsequently proving to have been inadequate;
    -- other factors, most of which are beyond White Mountains' control.

Consequently, all of the forward-looking statements made in this press release are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by White Mountains will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, White Mountains or its business or operations. White Mountains assumes no obligation to update publicly any such forward-looking statements, whether as a result of new information, future events or otherwise.

CONTACT: David Foy

Tel: (203) 453-1681

SOURCE White Mountains

CONTACT: David Foy for White Mountains, +1-203-453-168
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