In a filing describing the events over two weeks leading up to its merger agreement with Berkshire Hathaway, Alleghany reveals how Warren Buffett refused to negotiate on any of the three major changes to his offer that it sought.
 | THU, APR 14, 2022 | | | | You can do big deals quickly if you don't negotiate | After some "casual conversation" at a New York dinner meeting on March 7, Warren Buffett told Alleghany CEO Joseph Brandon he was interested in having Berkshire Hathaway buy the insurance company for $850 per share in cash, which works out to around $11.4 billion. But, according to an SEC filing this week, Buffett specified he was not offering to pay the fee charged by any Wall Street firm Alleghany might hire to advise it on a deal. Buffett also said, however, that the offer "was not subject to any financing condition or any geopolitical risks and that Berkshire would not need to conduct any due diligence." And Alleghany could have a brief "go-shop" period during which it could actively look for someone to make a better offer. Brandon took the offer to his board. Five days later, he and board Chairman Jefferson Kirby met with Buffett in Omaha. | After Brandon left the room (he had recently served as chairman and CEO of Berkshire subsidiary General Re, and Alleghany wanted to avoid any conflict of interest), Kirby tried to get a sweeter offer. He asked Buffett to "increase the price by increasing the $850 price per share or potentially by eliminating the deduction to the merger consideration for the fee payable to the financial advisor." Kirby also asked if Buffett would substitute Berkshire shares for some of the cash he was offering. The response, according to the filing: "Mr. Buffett reiterated the terms of his original offer, indicating firmly he did not intend to change his position on those points." Just nine days later, and two weeks after the initial offer over dinner, the companies announced a "definitive agreement" for Berkshire to buy Alleghany for $848.02 per share. The reduction of $1.98 per share represents Goldman Sachs' $27 million advisory fee. The 25-day "go-shop" period ends tonight at 11:59 PM ET. Allehhany says it reached out to 31 potential bidders. As far as we know, Alleghany hasn't received any other offers. Unsolicited offers can still be made and considered until the completion of the Berkshire merger. | Buffett is first interview for Charlie Rose's post-scandal return | The 1 1/4 hour interview of Warren Buffett by Charlie Rose posted today on Rose's website does not include any major revelations. Among other familiar topics, it covers Buffett's investing philosophy, his friendship with Charlie Munger, America's long-term economic progress, and the importance of working with people you like. Buffett did catch Business Insider's attention by saying of Elon Musk, "He's winning. That's America. You can't dream it up." And Barron's highlighted Buffett's proclamation that he "couldn't be in better health" and is not planning to step down as Berkshire CEO anytime soon. But the biggest news is the interview itself. | Warren Buffett is interviewed by Charlie Rose. | CharlieRose.com | On his site, CharlieRose.com, Rose says he is "proud to share" Buffett's "first interview on camera in almost a year and the first I've done in more than 4 years." It was four years ago that Rose was fired by CBS and lost his PBS talk show after the Washington Post reported on eight women who accused the now 80-year-old journalist of sexual harassment. Rose's #MeToo scandal is not mentioned in the Buffett interview. In its story today on Rose's return, the Los Angeles Times notes that he "acknowledged and apologized for his behavior,which included unwanted sexual advances toward the women, appearing nude in their presence and groping them." | BUFFETT AROUND THE INTERNET Some links may require a subscription | | | BERKSHIRE'S TOP U.S. STOCK HOLDINGS - Apr 14, 2022 | Berkshire's top holdings of disclosed publicly-traded U.S. stocks by market value, based on today's closing prices. Holdings are as of December 31, 2021 as reported in Berkshire Hathaway's 13F filing on February 14, 2022, except for Apple, Bank of America, and U.S. Bancorp, which also include shares held as of December 31, 2021 as disclosed in New England Asset Management's 13F filing on February 14, 2022, and except for Occidental Petroleum, which is as of March 16, 2022. In addition to U.S. stocks, shares held as of December 31, 2021 of China's BYD, as listed in Buffett's 2021 letter to shareholders, are included. The price of those shares in U.S. trading is used to approximate the current market value of the position. The value of the stake as a percentage of the company's market value is fixed at what was listed as of December 31, 2021 in the letter. The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker. | The newsletter is publishing this week on Thursday because U.S. stock markets are closed tomorrow for Good Friday. Please send any questions or comments about the newsletter to me at alex.crippen@nbcuni.com. (Sorry, but we don't forward questions or comments to Buffett himself.) If you aren't already subscribed to this newsletter, you can sign up here. -- Alex Crippen, Editor, Warren Buffett Watch | | | |
No comments:
Post a Comment