The Pilot Corporation, controlled by Cleveland Browns majority owner Jimmy Haslam and his family, and Berkshire Hathaway both announced on Tuesday that Berkshire has acquired Pilot’s remaining 20% of Pilot Travel Centers (PTC).
PTC, which does business as Pilot Flying J, is North America’s largest travel center operator, with more than 750 locations.
A Pilot Flying J travel center in Channelview, Texas, October 31, Photo: REUTERS/Gary McWilliams
Neither news release said anything about how much Berkshire paid to complete its purchase, but our best guess is somewhere in the very broad neighborhood of $3 billion.
In SEC filings last year, Berkshire listed a liability of $3.23 billion for “redeemable noncontrolling interests,” and in a section specifically about PTC, a $3.37 billion liability for “noncontrolling interests, predominantly redeemable.”
Putting a price on the remaining 20% was at the center of competing lawsuits in which both companies accused the other of trying to improperly affect PTC’s earnings, because under the terms of the original deal the selling price would be roughly 10 times those earnings. Pilot said that around one billion dollars was at stake.
Just under two weeks ago, one day before a Delaware court would have heard arguments on Pilot’s suit, the two sides announced a settlement, again with no details, clearing the way for this week’s transaction to proceed.
It’s possible the price could be disclosed in an upcoming quarterly or annual report SEC filing by Berkshire.
It’s happened five times through 2021, and now that the B shares are still trying to go beyond their 2022 and 2023 highs, it could be “major breakout number six.”
While the stock couldn’t get beyond the $360-$370 zone late last year, it is “still in an uptrend from the October ’22 lows (so) that area remains in the crosshairs.
“Once BRK.B regains its footing, we’ll be looking for new highs and then some.”
Berkshire makes small addition to its satellite radio bet
Berkshire has added another $85 million to its wager on Liberty SiriusXM’s tracking stocks.
In SECfilings this week, it reported purchases over three days of 1.2 million shares of Class A voting shares for $36.6 million (average price: $30.43) and 1.6 million shares of Class C nonvoting stock for $48.4 million (average price: $30.40).
Berkshire made purchases around the same size over three days earlier this month, so it has spent a total of $167 million so far this year, which is not much by Berkshire standards.
It estimates the tracking stocks are trading at a 33% discount to the value of the corresponding SIRI shares but warns that bears think SIRI is overvalued and will fall once the exchange is done.
Sumitomo ‘clarifies’ after CEO says Buffett is steadily adding to stakes
Sumitomo, one of the five big Japanese “trading houses” favored by Warren Buffett, clarified a comment by its CEO this week after he appeared to say Berkshire has been steadily buying more shares since disclosing increased stakes averaging 8.5% last summer.
