Berkshire Hathaway Says Knauf Made Offer for USG at $42 a ShareBerkshire Hathaway Inc. said Knauf entities earlier this month made a non-binding offer for USG Corp. at $42 a share, and the two held discussions on the proposed transaction.
Berkshire has so far not agreed to support any plan or proposal by Knauf, and there are no agreements between the two parties, according to a filing on Monday. Knauf has not responded to Berkshire’s proposed options on the purchase.
That represents a 25.3% premium to Friday's closing price in a down market. Berkshire's stake at $42 per share would be valued at $1,822,295,160 (versus $1,453,931,209.80 at Friday's closing price).
Berkshire
just filed a 13D/A (hat tip to rocketfinancial.com) which seemingly reiterates that it controls 43,387,980 shares of USG common stock (30.8% of class).
This number of shares exactly matches what I got from combining the BRK and New England Asset Management 13-Fs dated 31 Dec 2017 in my BRK Look Through Google Sheet, so does not represent a change. NICO seems to control the BRK 13-F portion of 39,002,016 shares (and parts of it are held via their subsidiaries), while GenRe controls the remaining NEAM portion of 4,385,964 shares. Warren Buffett is deemed to control the whole holding as he has control over NICO and GenRe.
This made me look up USG on Google Finance/News, and I found the above Bloomberg article, which presumably explains the 13D/A filing.
The juicy part was in the SEC 13D/A filing Notes which include:
Item 4 is hereby amended to add the following:
From time to time, beginning many years ago, executives of Gebr. Knauf Verwaltungsgesellschaft KG (“Gebr. Knauf”) and/or C & G Verwaltungs GmbH (“C & G Verwaltungs” and, together with Gebr. Knauf, the “Knauf Entities”) have contacted Berkshire’s Chief Executive Officer (“CEO”) to describe the Knauf Entities’ potential and conditional interest in a transaction with USG. Most recently, the Knauf Entities furnished Berkshire a copy of a letter from Gebr. Knauf to USG dated March 15, 2018 in which Gebr. Knauf submitted an indicative and non-binding proposal for the acquisition of 100% of the outstanding shares of Common Stock of USG at $42.00 per share.
On March 23, 2018 Berkshire’s CEO and another Berkshire executive held a telephonic discussion with two executives of the Knauf Entities and three representatives of one of the advisors of the Knauf Entities, during which Berkshire proposed to grant to the Knauf Entities an option to purchase all of the Berkshire Entities’ shares of Common Stock of USG, subject to legal review. Such option would be exercisable only in connection with the consummation of a purchase by the Knauf Entities of all of the outstanding shares of Common Stock of USG that the Knauf Entities did not already own, at a price of not less than $42.00 per share, subject to and in accordance with applicable law and contractual restrictions. The option exercise price per share was proposed by Berkshire to be the price per share paid to such other holders of Common Stock of USG by the Knauf Entities, less the option purchase price of $2.00 per share to be paid to the Berkshire Entities upon entering into a definitive option agreement. The option would have a term of approximately 6 months.
The Knauf Entities have not responded to this proposal, and the Reporting Persons do not know whether the Knauf Entities will pursue further discussion with Berkshire of the proposed option or will make an offer to purchase shares of Common Stock of USG. Berkshire has not agreed to support any plan or proposal by the Knauf Entities with respect to the Common Stock of USG, and there are no agreements, written or otherwise, between the Reporting Persons and the Knauf Entities.
Depending upon price, market conditions, availability of funds, evaluation of other investment opportunities, and other factors, the Reporting Persons may at any time and from time to time sell or otherwise dispose of some or all of the shares of Common Stock of USG held by them, either as contemplated by the Registration Rights Agreement or in another manner permitted by applicable law.
Item 5 is hereby amended as follows:
The percentages of outstanding shares reported in this Amendment No. 9 are based on the number of shares of Common Stock disclosed as outstanding on USG’s Form 10-K filed with the Commission on February 14, 2018.
