Buffett Said to Help Finance Burger King's Tax-Saving Deal

Tuesday, 26 Aug 2014 06:05 AM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink

Warren Buffett is helping to finance Burger King Worldwide Inc.’s planned takeover of Tim Hortons Inc., according to people familiar with the matter, backing a buyer that would move its headquarters to Canada where corporate taxes are lower,

Buffett’s Berkshire Hathaway Inc. would invest about $3 billion for a preferred stake, said one of the people, who asked not to be identified because there wasn’t a public announcement. Tim Hortons had a market value of about $10 billion after the stock rallied Monday on the announcement of talks with the Miami-based hamburger chain.

Burger King is controlled by Jorge Paulo Lemann’s 3G Capital, which joined Omaha, Nebraska-based Berkshire last year in a $23.3 billion takeover of HJ Heinz Co. Buffett bought half the ketchup maker’s common stock for about $4.25 billion and invested $8 billion for preferred shares that pay a 9 percent annual dividend.

“3G does a magnificent job of running businesses,” Buffett said in May at his company’s annual meeting in Omaha. “We’re very likely to partner with them, perhaps on some things that are very large.”

Editor's Note: Weird Trick Adds Up to $1,000 to Your Social Security Checks

Burger King rose 20 percent Monday to $32.40, the biggest jump since the stock debuted on the New York Stock Exchange two years ago. Tim Hortons, the Oakville, Ontario-based seller of doughnuts and coffee, climbed 19 percent to C$82.03, reaching a record high.

Inversion Deals

President Barack Obama has criticized American companies that move to other nations in search of lower corporate tax bills. Between mid-June and late July, at least five large American companies announced plans to make such a shift, known as an inversion. That includes AbbVie Inc. and Medtronic Inc.

Buffett has supported Obama’s push to increase personal income taxes for the wealthiest individuals while striking deals that reduce Berkshire’s obligations to the government. This year, his company limited taxes on more than $1 billion of gains in Graham Holdings Co. stock by swapping the shares for assets owned by the former Washington Post publisher.

“We don’t add a tip” on top of our tax bill, Buffett said at the annual meeting. “And we do certain transactions that are tax-driven.” He cited renewable-energy investments that help lower Berkshire’s taxes.

Later that month, he addressed drugmaker Pfizer Inc.’s bid for London-based AstraZeneca Plc, an offer that was subsequently withdrawn.

‘Not Attacking’

“I’m not saying they’re doing anything illegal at all in following the rules on inversion,” Buffett told CNBC, according to a transcript on the business news station’s website. “I would personally change that part of the law. And other people might change the part of the law about wind tax credits, but I’m not attacking Pfizer for following the U.S. tax law.”

A combination of Burger King and Tim Hortons would result in a company with about $22 billion in sales and more than 18,000 restaurants in 100 countries. The companies said in a statement that the resulting operation would have headquarters in Canada.

Burger King declined to comment, while Buffett and a representative from Tim Hortons didn’t immediately return messages seeking comment on Berkshire’s role, which was reported late yesterday by the Wall Street Journal. A deal could be announced as soon as this week, one of the people familiar with the matter said.

Editor's Note: Weird Trick Adds Up to $1,000 to Your Social Security Checks

© Copyright 2014 Bloomberg News. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
You May Also Like

Fund Manager Hussman Sees 'Ingredients of a Market Crash'

Monday, 29 Sep 2014 22:37 PM

You can add mutual fund manager John Hussman,president of Hussman Investment Trust, to the list of those who think stock . . .

Insana: 'Bill Gross Is Not Crazy'

Monday, 29 Sep 2014 22:23 PM

Some news reports stated that Bill Gross was about to be fired from Pimco before he quit because of erratic behavior. < . . .

China Experts: Hong Kong Protests Are Cause for Investor Concern

Monday, 29 Sep 2014 22:12 PM

The conflict between Hong Kong authorities and pro-democracy protestors in the region should grab the attention of inves . . .

Most Commented
Top Stories

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved