By Dr. David Kass PhD
In a Berkshire Hathaway (BRK.A, BRK.B) news release dated December 12, 2014, “Berkshire Hathaway Completes Investment in Restaurant Brands International Inc.”, Berkshire revealed that it currently owns 4.18% of the common shares of Restaurant Brands International (QSR), and it controls 14.37% of the total number of votes attached to all outstanding voting shares of the Corporation.
Upon the closing of the Burger King (BKW) acquisition of Tim Horton’s (THI) on December 12, 2014, Berkshire purchased, for a total of $3 billion, a 9% perpetual voting preferred stock and exercised a warrant to purchase 8,438,225 common shares at the exercise price of $0.01 per share (at a cost of $84,382.25). The exercise of this warrant represented 1.75% of the common shares of the merged firm.
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However, Berkshire’s press release indicates that it now owns 4.18% of the outstanding common shares of QSR. Therefore, Berkshire apparently owned 2.43% of the combined firm’s shares prior to the merger’s closing. This investment had not previously been revealed. The 4.18% stake translates into approximately 20.2 million shares which, at BKW’s closing price on December 12 of $35.50 per share, are currently valued at about $715 million.