|New Threads Only:|
|New Threads & Replies:|
Forum List » Guru News and Commentaries|
Guru News, Stock picks and commentaries
Early Movers for Thursday Feb. 14, 2013
Posted by: earningsyield (IP Logged)
Date: February 14, 2013 09:57AM
U.S. equity markets continue to look for a clear direction as earnings season continues and economic and political leaders get ready for the G20 summit in Saint Petersburg, Russia. Markets are overvalued at current levels with the market trading at a Shiller P/E of 23 compared to its historical mean of 16.5. But don’t count on markets correcting just for the sake of correcting — M&A activity seems to be picking up with the latest buyout coming from none other than Warren Buffett.
This morning it was announced that H.J. Heinz (HNZ) agreed to be acquired by Buffett’s Berkshire Hathaway (BRK.A)(BRK.B) and 3G Capital Management for $28 billion or $72.50 per share. The purchase price represents a 20% premium to Wednesday’s close and has already been unanimously approved by Heinz’s board.
Berkshire Hathaway and 3G will each put up $4.4 billion in equity for the deal, along with debt financing from J.P. Morgan Chase (JPM) and Wells Fargo (WFC). Berkshire is also buying $8 billion of preferred stock that pays 9 percent.
Reports from various media outlets note that 3G approached Buffett in December about a possible deal for the food products manufacturer. From there, Buffett and 3G approached Heinz’s chairman and CEO William (Bill) Johnson about the deal, and the first offer was made in mid-January. While Berkshire will help in the financing of the deal, 3G will handle the operational side as Buffett was quoted during an interview with CNBC, "Heinz will be 3G's baby."
Guru Discussed: Tweedy Browne: Current Portfolio, Stock Picks
David Einhorn: Current Portfolio, Stock Picks
Stocks Discussed: BRK.A, HNZ, PEP, GM, CSCO,
Disclaimers: GuruFocus.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on GuruFocus.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The gurus may buy and sell securities before and after any particular article and report and information herein is published, with respect to the securities discussed in any article and report posted herein. In no event shall GuruFocus.com be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on GuruFocus.com, or relating to the use of, or inability to use, GuruFocus.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. The gurus listed in this website are not affiliated with GuruFocus.com, LLC. Stock quotes provided by InterActive Data. Fundamental company data provided by Morningstar, updated daily.