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Berkshire Hathaway Inc. Message Board

  • biddingsession biddingsession Feb 14, 2013 4:23 PM Flag

    Why exactly is BG in on this deal?

    I know they brought the deal to BRK, so he probably can't cut them out immediately, but what do they bring to the table on this deal exactly?

    They are only putting in $4 billion which BRK could have easily covered itself. Furthermore, BG presumably at some point will want to get out. Typically, hedge funds like this want to get in, fire current management, cut costs, and then go public again for a nice profit. And yet Buffett's rule book says he only buys when current management is already doing a good job, since he is not interested in managing business.

    The only logical explanation is that Buffett actually wants to get in the fixer upper business in violation of his acquisition rules, but doesn't want to accept direct responsibility for doing so. By his statement that this BG's baby, he will let them go in, restructure and fire, and improve operations raising the value of the company.

    And then several years down the line, they sell their stake to BRK at a profit and leave for their next deal. BRK pays them off and then owns all of Heinz, while claiming to not have canned people and went into the fixer-upper business even though they really did.

 
BRK-B
128.35+0.22(+0.17%)Jul 24 4:00 PMEDT

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