Thursday, February 14, 2013

I Wonder If Warren Buffet's Hard Working Secretary Is In On This, Too

John Kerry is about to become a much richer man, thanks to that shrewd capitalist Warren Buffet*.
H.J. Heinz Co. said it agreed to be acquired by Berkshire Hathaway Inc. and private-equity firm 3G Capital for more than $23 billion.

Under the terms of the deal, which has been unanimously approved by Heinz's board, shareholders will receive $72.50 in cash for each share, a 20% premium to Wednesday's close.
And so it goes in a fascist nation. Big business, big investors and big government all working together to bring about a brighter future.

For them.

Also: Over at Zerohedge, there's this comment: buying a company at a premium to its all time high share price...that is smart investing right there. maybe uncle warren just wanted to bathe in ketchup

Let's check that out.

Yup. The all-time high for HNZ is about $60. A 20% premium was paid to the Heinz-Kerrys.
* - A shrewd capitalist who just happens to be in bed politically with the current Administration.

Update: At the WSJ article linked above, commenter Jack Marse points out that HNZ's Price-to-Earnings Ratio is 19. A stolid company like Heinz ought to have one around 12 or so. That means the stock is overpriced at $60. At $72, it's total madness to buy it. Unless there's something else in it to sweeten the deal. Like the ear of the regulators who influence Warren Buffet's investments ...


tom said...

Instead of savings bonds, my parents get DRIP stocks for my kids. One of their stocks is Heinz :-)

Hopefully this keeps the kids under the reportable income limit when they force us to sell the stocks. Computing the basis on these things can be a pain.

K T Cat said...

So what you're saying is this was for the children. I should have known there was a thoroughly altruistic reason at its heart.

tom said...

For my kids, not yours ;-)

tom said...

And the plot thickens... "SEC freezes assets of Swiss-based account used in suspicious trades ahead of Heinz deal; says "unknown traders took risky bets" on Heinz stock gains. MORE »"

K T Cat said...

Wow. Awesome find, Tom.