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Beanz Meanz Buffett! Investors cheer $28bn Heinz deal
Liontrust fund manager Stephen Bailey has welcomed Warren Buffett's $28 billion offer for baked beans maker Heinz.
Investors pounced on Heinz shares on Thursday afternoon after the news that Warren Buffett's Berkshire Hathaway, together with 3G Capital, was buying the Tomato Ketchup maker and globally recognised brand.
Liontrust's Stephen Bailey, who counts among few UK investors to hold the stock, welcomed the $28 billion offer for Heinz. 'It's obviously good news; at the end of the day this is a company going for around £18 billion in sterling terms for a premium of 20%,' he told Citywire.
Buffett wants to take the beans maker private and has already had his cash offer approved by the Heinz board.
Buffett told CNBC that 3G Capital, his partner in the bid, would deal with the operational side of the business, while his role involved the commitment of between $12 billion and $13 billion.
'It's our kind of company,' he told the news station.
Buffett's bid for Heinz has been cheered by investors with the company's US shares trading up by around 19%.
Bailey said that given Buffett's fondness of big, global brand he was not surprised to see his offer come in for Heinz, but added he will be watching closely the impact of the bid on the wider sector.
Bailey said Kleenex tissue maker Kimberly-Clark could well be the next brand snapped up.
'The other names, like Unilever, are too big to swallow,' he explained.
Once the Heinz deal has been finalised, Bailey said he will be looking at firms that offer similar characteristics - visible, global brands offering exposure to emerging market growth.
Bailey, who runs the Citywire Selection Liontrust UK Macro Growth and Liontrust Macro Equity Income funds with Jan Luthman, bought into Heinz at around $47 and like other investors stands to receive $72.50 a share once Buffett's offer is fully approved.
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by Gavin Lumsden on Dec 06, 2013 at 17:33