business

Warren Buffetts $11.6 billion deal started with a dinner in New York

Warren Buffetts $11.6 billion deal started with a dinner in New York

  • A New York City dinner between Warren Buffett and Alleghany Corp Chief Executive Officer Joseph Brandon kicked off one of Berkshire Hathaway Incs latest deal hunts
  • The pair met for dinner on March 7, when Buffett made it clear that Berkshire was interested in buying Alleghany for $850 a share, according to a regulatory filing released Monday
  • That conversation would jump-start Berkshires bid for Alleghany that culminated in a $11
  • 6 billion deal for the insurer announced later that month
  • Its one of the biggest acquisitions in years for Berkshire and Buffett, its billionaire CEO
  • He has revved up his deal machine recently, with the conglomerate also buying up shares in Occidental Petroleum Corp
  • and revealing a new equity bet on HP Inc
  • At that dinner, Buffett insisted that the price wouldnt include fees for financial advisers
  • That quirk resulted in an odd $848
  • 02 announced deal price
  • The fee for Goldman Sachs Group Inc, which is advising Alleghany, would come out of the proceeds for insurers shareholders
  • The agreement would have to survive some push-back by Alleghanys negotiators
  • Jefferson Kirby, the companys chairman, pushed Buffett on the price at a meeting in Omaha, asking him to increase the offer or eliminate the deduction for the financial adviser fee
  • He also pushed for a lucrative -- but often unattainable -- feature in a Buffett deal: Using Berkshire shares as a portion of the offer
  • Buffett, who has talked about his dismay in using Berkshire stock to buy Dexter Shoe and General Re, held firm
  • Goldman ultimately contacted 23 potential strategic bidders and eight potential financial-sponsor bidders during a go-shop period to see if theyd have a superior offer for Alleghany, the filing shows
  • The go-shop period ends at 11:59pm New York time on April 14
.

business 2022-04-13 TOI