Berkshire News Briefs - 9/5/14

Buffett’s Burger King Deal Has Warrant for 1.75% Stake (Bloomberg)

Berkshire Hathaway Inc.’s $3 billion of financing for Burger King Worldwide Inc.’s planned takeover of Tim Hortons Inc. gives billionaire Warren Buffett the option to buy a 1.75 percent stake in the combined company. Buffett’s company received the warrant to buy common shares and agreed to purchase 30,000 preferred shares as part of the deal, Miami-based Burger King said yesterday in a regulatory filing. The perpetual preferred securities pay a 9 percent coupon. [...] “Berkshire’s participation on this deal demonstrates its ability to use its strong balance sheet and massive cash generation to capture very attractive returns, even without the backdrop of a financial crisis,”[...]

Canadian identity wrapped up in homegrown ‘Timmy’s’ (Omaha World-Herald)

Few things unite Canadians the way Tim Hortons does. [...] So news last week that Burger King will buy Tim Hortons -- helped by $3 billion of preferred equity financing from Warren Buffett’s Berkshire Hathaway -- served as a bittersweet reminder of how beloved the homegrown chain is in Canada. Seventy-five percent of all the coffee sold at fast-food restaurants in Canada comes from “Timmy’s,” [...] While the takeover by Burger King, which is based in Miami but controlled by a Brazilian private equity fund, is getting much attention in Canada, it’s not causing panic. U.S.-based Wendy’s recently owned Tim Hortons and its brand remained intact. Wendy’s then spun off Tim Hortons as a separate company in 2006 after more than a decade of ownership.

Acme Brick employees sue Buffett’s Berkshire Hathaway for cutting retirement benefits (Fort Worth Star-Telegram)

Two employees and a retiree of Fort Worth-based Acme Brick Co., including the company’s chief financial officer, have sued the company and its parent, Berkshire Hathaway, alleging the company improperly reduced the company match on its 401(k) retirement plans and froze its pension plan. The class action suit, filed Aug. 15 in U.S. District Court in Fort Worth, says Berkshire Hathaway, run by multi-billionaire Warren Buffett, broke a pledge it made when it acquired Acme with Justin Industries in 2000 not to reduce benefits in the company’s retirement plans. [...] Acme Brick’s senior management on July 15 voted to make changes to the retirement plans urged by Buffett, Berkshire’s chief executive officer, and Marc Hamburg, its chief financial officer. Otherwise “Berkshire Hathaway intended to divest itself of Acme as a subsidiary,” the lawsuit says. [...] The lawsuit alleges that the changes to Acme’s retirement plans violate the federal Employee Retirement Income Security Act, commonly known as ERISA.

'The whole system is suffering': Words of frustration, caution at hearing on rail delays (Omaha World-Herald)

BNSF is working on improvements with all the gusto it has, company marketing chief Stevan Bobb said. “We know our service has not met your needs,” said Bobb, addressing the room full of farmers, grain cooperative officials and other shippers. Bobb noted the the company’s shipments from North Dakota — a state bulging with wheat, corn, barley, crude oil, soybeans and many other commodities — are at a record. Grain shipments from North Dakota this year, Bobb said, are still higher than a year ago, delays or not. BNSF, he told commissioners, is shifting railcars to the region and counting on track improvements scheduled to wrap up in October. “We should have the capability to move record volumes. Note that I said should,” Bobb said. “If all the bushels want to move in the same month, your railroad could be running like a sewing machine and you are still going to be late.”

Why Bill Gates And Warren Buffett Are Railroad Rivals (Business Insider)

[...] even though both billionaires are philanthropically entwined, when it comes to the old-school realm of investing in North America's railroads, Gates and Buffett part ways. [...] In Gates' case, his railroad stake can be viewed as simply an investment -- evidently a timely one -- but nothing more than that. Gates isn't running CN. But Buffett, because Berkshire Hathaway owns BNSF, is effectively running the railroad.

Buffett Search for Sure Thing Propels 76-Year Junk Food Quest (NewsMax)

Billionaire investor Warren Buffett got his entrepreneurial start at age 7, buying six-packs of Coke for a quarter, then hawking the beverages for a nickel apiece on hot summer nights. Now, at age 83, he’s still betting on simple indulgences. Berkshire Hathaway Inc. agreed Tuesday to provide $3 billion of financing for Burger King Worldwide Inc.’s purchase of doughnut chain Tim Hortons Inc. [...] Berkshire also owns See’s Candies and Dairy Queen, which sells ice cream and burgers. In 2008, Buffett’s firm helped finance Mars Inc.’s purchase of chewing-gum maker Wm. Wrigley Jr. Co. [...] For fast-food chains and candy and soda companies, Buffett “can look into the future and not have to wonder if they’re going to be doing great things,”

Why Buffett's son bought Rosa Parks archive (CNN Money)

Howard Buffett, the youngest son of the billionaire investor, said he was thinking of his mother when he paid $4.5 million for a trove of historic belongings left by civil rights activist Rosa Parks. "I knew that my mom would think that it was something that should get done," Buffett told CNNMoney. [...] "This is an incredible part of history, and to have that history locked in a chamber somewhere is not right," Buffett said. Buffett runs the Howard G. Buffett Foundation, which works in the developing world to improve agriculture and clean water delivery. He said the Parks material would be turned over to an institution that would ensure its availability to historians and others.