Warren Buffett denied that he was planning to take Coca-Cola private, after another investor alleged the billionaire might be orchestrating a “sweetheart, insider deal” which sent the US drinks company’s shares higher.
David Winters, chief executive and portfolio manager of Wintergreen Advisers, which holds 2.5m Coke shares, wrote to the drinks maker’s board saying he was worried that Buffett’s Berkshire Hathaway, Coke’s largest shareholder, might be planning to take the company private.
Buffett told CNBC on Tuesday there was “absolutely no chance of that”. Coke shares closed up 0.6 per cent at $40.92 after earlier rising 1.3 per cent.
In March Winters launched a public campaign against Coke’s employee stock plan, saying it was overly dilutive to shareholders and urging Buffett to oppose it. Buffett abstained from voting on the proposal and afterwards criticised it as “excessive”.
Winters said he was raising his latest concerns based on media reports suggesting Buffett may be working on a buyout of Coke with private equity group 3G Capital. Winters suggested Berkshire and 3G could use their 2013 takeover of Heinz as a model.
“We are concerned that a similar type of sweetheart, insider deal for Coca-Cola could, in our opinion, significantly undervalue Coca-Cola and irreparably harm Coca-Cola shareholders,” Winters wrote. He said he was urging the board to address potential conflicts of interest.
The reports Winter cited, from Fortune magazine and Brazil’s Isto E Dinheiro, did not directly quote Buffett or Jorge Paulo Lemann, the Brazilian billionaire behind 3G, about any plans for a takeover.
Coke declined to comment.