Tuesday, 21 October 2014
Last updated 8 hours ago
Feb 15 2013 | 3:02am ET
Warren Buffett has not had kind words for private equity firms in the past, but that did not stop him from joining forces with one to buy H.J. Heinz.
Buffett's Berkshire Hathaway is buying the iconic condiment-maker for $23.2 billion in a leveraged buyout with New York-based 3G Capital. Both sides will own half of the company, but Berkshire will put up more cash—$12 billion to 3G's $4 billion—even though 3G will actually manage the company. Berkshire will get preferred shares that will pay a 9% dividend.
"Heinz will be 3G's baby," Buffett said on CNBC.
Indeed, 3G was the driving force behind the deal, although Buffett said he has been eyeing Heinz for more than 30 years. 3G founder Jorge Lemann approach Buffett about taking Heinz private in December, and Lemann met with Heinz CEO William Johnson later in the month. Work on the deal really got under way just two weeks ago.
Buffett said Berkshire may also serve as the exit strategy for the private equity firm, which bought Burger King two years ago. "We may increase our ownership if any members of the 3G group ultimately want to sell out later," Buffett told The New York Times, saying he had no intention of ever selling Heinz.
Berkshire and 3G's offer is a 19% premium to Heinz's previous all-time high share price. Buffett has said he will not raise the bid. Banks will finance debt to pay for the rest of the deal.
Sep 22 2014 | 4:15pm ET
"I tell people that everybody likes good news and so if you have good performance that’s wonderful,” explains Mike McKitish of Peddie School's endowment, “but it’s the people that want to talk about the bad news or where they drifted and how they came back and how they stayed to their discipline…” that he wants to hear from. Read more…
Sep 30 2014 | 9:29am ET
The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…
Most traders agree that proper risk management is the key to successful trading. However, many traders depend on the deeply flawed measure of standard deviation as a benchmark of risk. Here we put it ...