One of Warren Buffett’s biggest acquisitions in recent years began at a dinner in New York City between the legendary investor and the CEO of Alleghany Corp., Joseph Brandon, reports BNN Bloomberg. The two men met for dinner on March 7th, and Buffett told Brandon that his company Berkshire Hathaway was looking to buy Alleghany for $850 per share.
True to his word, later in March Berkshire put in a bid for Alleghany that resulted in a $11.6 billion purchase of the insurance company. That’s not the only recent deal for Buffett and Berkshire; he recently bought shares in Occidental Petroleum Corp. and announced a new equity bet on HP Inc, reports Bloomberg.
In a regulatory filing earlier this month that details that fateful March 7th dinner, it was also revealed that Buffett told Brandon that the price excluded financial advisor fees—a significant detail that accounts for the odd $848.02 deal price that was announced. Instead, the fee for Alleghany’s advisor, Goldman Sachs, will come out of the proceeds for Alleghany’s shareholders.
The article also reveals that Alleghany’s chairman Jefferson Kirby pressured Buffett to increase the offer or get rid of the deduction for the financial advisor fee, as well as pushed him to use Berkshire shares as part of the offer. But Buffett would not be swayed. While Goldman solicited a handful of potential bidders during the traditional “go-shop” period, that period ended on April 14th with Berkshire—and Buffett—still the winner.
