David Winters of Wintergreen Advisers said recently that Warren Buffett is planning to take The Coca-Cola Company (NYSE:KO) private in a leveraged buyout, but Buffett denies it. Buffett told CNBC, that there’s “absolutely no chance of that.”
Winters criticizes Buffett
Winters has apparently sent letters to The Coca-Cola Company (NYSE:KO) shareholders, as well as the company’s board and Buffett himself. He criticized the soda maker’s equity plan for this year, which he believes will “significantly erode” the company’s stock price. Winters also said he thinks Buffett will do something similar to what he did with H.J. Heinz Company to Coca-Cola. In that case, he conducted a leveraged buyout and took Heinz private.
Buffett’s firm Berkshire Hathaway Inc (NYSE:BRK.A) (NYSE:BRK.B) owned approximately 9% of The Coca-Cola Company (NYSE:KO) as of the end of last month. That amounts to 400 million shares.
Is Winters crazy?
CNBC’s Becky Quick said as soon as she heard David Winters’ comments about The Coca-Cola Company (NYSE:KO) and Buffett, she immediately called up the Oracle of Omaha to ask him about it. She said her initial reaction was that it was crazy and that Buffett actually asked her to repeat herself, possibly suggesting that he thought it was crazy too. CNBC anchors pointed out that Coca-Cola shares are quite expensive and that it would take a lot of capital to do a leveraged buyout of the soft drink maker.
Winters has been locked in battle with The Coca-Cola Company (NYSE:KO)’s management, expressing his disgust regarding the stock payout the soft drink maker is planning for certain employees. The plan was included in Coca-Cola’s recent proxy, and Winters launched a proxy battle, although he didn’t win.
Warren Buffett has said that he was also opposed to the stock payout plan, but he separated himself from Winters, saying that he likes The Coca-Cola Company (NYSE:KO)’s management. With Winters’ recent comments, it seems like he hasn’t given up his battle.