One of Warren Buffett’s best deals in recent years was his 2014 financing of Burger King’s acquisition of Canadian Restaurant Chain Tim Hortons.
The deal was financed by Berkshire Hathaway, and Berkshire’s role gave the conglomerate ownership and control over 4.18% of the outstanding Common Shares and 14.37% of the total number of votes attached to all outstanding voting shares of the newly created Restaurant Brands International.
The company has continued to grow, and in 2017 gobbled up Popeyes Louisiana Kitchen for $1.8 billion.
What made the deal one of Buffett’s best was Berkshire’s right to purchase 8,438,225 common shares of Restaurant Brands for a penny a share. The warrants came attached to 68,530,939 Class A 9.00% Cumulative Compounding Perpetual Preferred Shares that Berkshire acquired during the financing.
Berkshire has been sitting in the catbird seat, and with Restaurant Brands’ stock currently at $62.77 a share, Buffett is ahead a remarkable 620,770%.
It’s a reminder that Buffett is not just a great stock picker, he’s one the greatest dealmakers.
Restaurant Brands International, which trades under the symbol QSR, was trading in the $40s when the company was formed, and is still drawing interest at prices fifty percent higher than that.
Billionaire Kenneth C. Griffin has amassed 4.6 million shares of Restaurant Brands’ stock.
Griffin has been ranked as the 52nd richest person in America, and his Citadel LLC has developed a reputation for astute investments.
Griffin got his investing start in 1987, when as a 19-year-old sophomore at Harvard University, he started trading from his dorm room with a fax machine, a personal computer, and a telephone.
© 2018 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.