Charles Munger, the billionaire business partner of Warren Buffett, promised to host a question-and-answer meeting for shareholders of his Wesco Financial Corp. if they approve a sale of the company to Berkshire Hathaway Inc.
Munger, 87, plans to hold an “Afternoon with Charlie” in Pasadena, California, after the merger to give Berkshire and former Wesco shareholders a chance to ask him about “business, economics and life,” Wesco said in a statement today announcing the deal. Berkshire agreed to pay $547.6 million for the 19.9 percent of Wesco it doesn’t own. The session would replace Wesco’s annual meeting.
Munger, Wesco’s chief executive officer and Berkshire’s vice chairman, won a cult following among investors for his economic insights and a direct manner of delivering his views. His speeches and remarks are collected in “Poor Charlie’s Almanack,” now in its third edition, and his annual meetings of Wesco shareholders have drawn thousands of investors.
“It’s really a terrific experience to hear his views on life and the world and economics, and I’m thrilled that he’s going to do it again this year,” said Glenn Tongue, a partner at T2 Partners LLC who, as a Berkshire and Wesco shareholder, plans to vote for the deal. “It wouldn’t shock me if this were the new format for access to Charlie.”
The Berkshire buyout would relieve Munger of the responsibilities of managing a public company and give Buffett, 80, the freedom to run the unit without interference from minority shareholders. Buffett, Berkshire’s chairman and CEO, is seeking to simplify the firm’s holdings as he prepares the company for the next generation of leaders.
Berkshire must win the approval of a majority of Wesco’s minority shareholders at a special investor meeting, according to the statement. Shareholders can choose cash or Omaha, Nebraska-based Berkshire’s Class B common stock. The deal values Wesco at about $386.55 per share, which is the company’s book value as of Jan. 31, according to the statement.
Berkshire took majority control of Wesco in 1983. The stock advanced more than 20-fold since the end of that year as Buffett and Munger transformed Wesco from a California lender into a unit that stores steel, rents furniture and sells insurance to banks and airlines. Wesco rose $4.15, or 1.1 percent, to $384.82 at 9:51 a.m. on the New York Stock Exchange.
The “Afternoon with Charlie” will replace a 2011 Wesco annual meeting and may be held on May 4 if the deal has been completed by then, Wesco said. Munger appears on stage with Buffett in front of tens of thousands of people each year at Berkshire’s annual meeting in Omaha. Berkshire’s meeting is scheduled for April 30.
Berkshire announced its Wesco bid on Aug. 26. Pasadena- based Wesco named board members Carolyn Carlburg, Robert Flaherty and Elizabeth Caspers Peters to a “special committee of independent directors” in September to review Buffett’s bid.
The committee “determined that the merger agreement and the transactions contemplated thereby, including the merger, are fair to and in the best interests of Wesco and its shareholders other than Berkshire Hathaway and its affiliates,” the company said in the statement.
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