This is an interesting article by Barron's Andrew Bary delving into the $848.02 number (it is $850 less the GS advisory fee which Buffett insisted he wasn't paying for). Also there is some discontent that Berkshire is getting too good of a deal, although the article does point out that the premium to book is significantly greater than where $Y stock has traded in recent years. While there is a 25-day "go shop" period, there is also no breakup fee should $Y find a higher bidder. This is like Buffett providing Alleghany with a free option while they go and shop the company to higher bidders. Usually Buffett would insist on a break-up fee. Not this time. https://www.barrons.com/articles/warren-buffett-berkshire-hathaway-alleghany-51647960243
Great analysis and very well written. The early March Alleghany share purchases by Joe Brandon might raise a few eyebrows but that can be cleared up easy enough once we find out when the negotiations with Berkshire transpired. I hope the acquisition goes through and Buffett and Ajit start working their compounding magic.
the CFO made purchases after Brandon, but presumably both people did before the acquisition talks. Buffet is known to be quick with decison making so that wouldnt be a surprise.
I’ve read that Buffett initiated the deal so it likely happened very recently and very quickly. We will learn about the sequence of events shortly when Allegheny releases the proxy for the deal.
Andrew Bary of Barron's thinks a bidding war for Alleghany could soon erupt, naming Markel among others as potential suitors. The fact that there is no break-up fee effectively gives Alleghany a free put option at $848.02 while they "go shop". It is unusual that Buffett did not put a break-up fee into the deal. https://www.barrons.com/articles/watch-out-warren-buffett-a-bidding-war-for-insurer-alleghany-could-erupt-51648222639
This is an interesting article by Barron's Andrew Bary delving into the $848.02 number (it is $850 less the GS advisory fee which Buffett insisted he wasn't paying for). Also there is some discontent that Berkshire is getting too good of a deal, although the article does point out that the premium to book is significantly greater than where $Y stock has traded in recent years. While there is a 25-day "go shop" period, there is also no breakup fee should $Y find a higher bidder. This is like Buffett providing Alleghany with a free option while they go and shop the company to higher bidders. Usually Buffett would insist on a break-up fee. Not this time. https://www.barrons.com/articles/warren-buffett-berkshire-hathaway-alleghany-51647960243
Great analysis and very well written. The early March Alleghany share purchases by Joe Brandon might raise a few eyebrows but that can be cleared up easy enough once we find out when the negotiations with Berkshire transpired. I hope the acquisition goes through and Buffett and Ajit start working their compounding magic.
the CFO made purchases after Brandon, but presumably both people did before the acquisition talks. Buffet is known to be quick with decison making so that wouldnt be a surprise.
I’ve read that Buffett initiated the deal so it likely happened very recently and very quickly. We will learn about the sequence of events shortly when Allegheny releases the proxy for the deal.