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Buffett, Brazil Team Up To Buy "Heinz"

Mike

Well-known member
U.S. interests are not in Buffets vocabulary.........................

Evidently, Buffett and 3G Capital like what they see. According to Bloomberg, they are paying about 14.6 times earnings before interest, taxes, depreciation and amortization, well above the 7.6 times multiple paid in similar deals. Shares of other food companies, such as Campbell Soup (CPB +1.76%), are rising as well.

Buffett has made other bets in consumer products, with holdings in Coca-Cola (KO +1.57%), Johnson & Johnson (JNJ +0.46%) and Kraft Foods (KRFT +0.02%). He helped Mars Inc. in its $28 billion takeover of chewing gum maker Wm. Wrigley Jr.

Based in Brazil, 3G Capital, is no stranger to the food business either and will manage the operations of Heinz when the deal closes. It acquired Burger King (BKW +4.70%) in 2010 for $3.3 billion and took the fast food chain public last year.
 

Mike

Well-known member
The SEC accuses "unknown traders" of having advance word of the deal and buying options a day ahead of the news to make "risky bets" that Heinz's stock price would rise. Both the size and the timing of the trades raised suspicions at the SEC.

According to the government, the traders made more than $1.7 million when Heinz's stock soared almost 20 percent after the merger was announced publicly.

(Read more: SEC Looks at Trades a Day Before Heinz Deal )

The emergency court order freezes assets in a trading firm based in Zurich, Switzerland. The SEC said the freeze guarantees that potentially illegal profits can't be taken out of the account while its investigation continues.

According to an SEC official, the suspicious traders will "now have to make an appearance in court to explain their trading if they want their assets unfrozen."
 
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