TheEnforcer
01-28-2005, 11:54 AM
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Buffett: 'It's a dream deal'Billionaire investor sees longstanding bet on Gillette pay off with one-day gain of $776 million.
January 28, 2005: 11:08 AM EST
NEW YORK (CNN/Money) - Legendary investor Warren Buffett had nothing but praise Friday for Proctor & Gamble Co.'s $57 billion deal for Gillette, which helped him make $776 million -- in one day.
"This merger is going to create the greatest consumer products company in the world," said Buffett, whose Berkshire Hathaway holding company is Gillette's largest shareholder with 96 million shares, or about 9 percent of the company.
"It's a dream deal," he said, adding that he would increase his holdings so that he would end up with 100 million shares of P&G by the time the deal closes. Under the offer from P&G, Buffett's Gillette stock would translate to about 93.6 million shares of P&G.
Even for a billionaire like Buffett, who is one of the country's wealthiest men and one of the world's most widely following investors, $776 million is not bad for a day's work.
That's the apparent one-day paper profit Berkshire Hathaway would realize from Procter & Gamble's purchase of Gillette -- based on the deal's premium of about $8.09 a share on each of the 96 million Gillette shares.
Buffett is poised to become P&G's biggest shareholder after the deal. Barclays Global Investors is now the largest shareholder with about a 3.6 percent stake, according to Factset Research. But dilution from the deal would lower its stake, and its roughly 92 million shares would be less than what Buffett will end up with.
Buffett has been Gillette's largest single stockholder since 1989, when his firm bought $600 million in preferred stock, establishing an 11 percent stake in the maker of razors and other men's products, according to news reports. At the time, Gillette had recently fought off two hostile takeovers.
"Over that time we've been happy with that investment but I've got to tell you I'm happier today," Buffett said in a statement played Friday during a conference call to discuss the deal.
Buffett: 'It's a dream deal'Billionaire investor sees longstanding bet on Gillette pay off with one-day gain of $776 million.
January 28, 2005: 11:08 AM EST
NEW YORK (CNN/Money) - Legendary investor Warren Buffett had nothing but praise Friday for Proctor & Gamble Co.'s $57 billion deal for Gillette, which helped him make $776 million -- in one day.
"This merger is going to create the greatest consumer products company in the world," said Buffett, whose Berkshire Hathaway holding company is Gillette's largest shareholder with 96 million shares, or about 9 percent of the company.
"It's a dream deal," he said, adding that he would increase his holdings so that he would end up with 100 million shares of P&G by the time the deal closes. Under the offer from P&G, Buffett's Gillette stock would translate to about 93.6 million shares of P&G.
Even for a billionaire like Buffett, who is one of the country's wealthiest men and one of the world's most widely following investors, $776 million is not bad for a day's work.
That's the apparent one-day paper profit Berkshire Hathaway would realize from Procter & Gamble's purchase of Gillette -- based on the deal's premium of about $8.09 a share on each of the 96 million Gillette shares.
Buffett is poised to become P&G's biggest shareholder after the deal. Barclays Global Investors is now the largest shareholder with about a 3.6 percent stake, according to Factset Research. But dilution from the deal would lower its stake, and its roughly 92 million shares would be less than what Buffett will end up with.
Buffett has been Gillette's largest single stockholder since 1989, when his firm bought $600 million in preferred stock, establishing an 11 percent stake in the maker of razors and other men's products, according to news reports. At the time, Gillette had recently fought off two hostile takeovers.
"Over that time we've been happy with that investment but I've got to tell you I'm happier today," Buffett said in a statement played Friday during a conference call to discuss the deal.