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Warren Buffett’s Berkshire Hathaway averted a courtroom showdown over its purchase of a truck stop operator founded by a Tennessee billionaire, after settling a dispute centred on the value of the business.
Berkshire had struck a deal about six years ago to acquire an interest in Pilot Travel Centers, founded by billionaire James “Big Jim” Haslam II, patriarch of a powerful Tennessee family.
The acquisition was done in stages. Berkshire now controls the network with an 80 per cent stake bought for almost $11bn. The Haslams also had an option to sell the remaining 20 per cent stake to Berkshire.
But the deal ended in acrimony. In October, the Haslam family company Pilot Corp accused Buffett’s conglomerate of changing the truck stop chain’s accounting methodology to make it look less profitable and lower the value of the remaining 20 per cent stake.
Berkshire hit back in November, accusing the founder’s son Jimmy Haslam III, co-owner of the Cleveland Browns football team, of seeking to suborn executives at Pilot into inflating the company’s profits, by secretly promising them payments.
The price for the remaining 20 per cent stake was to be based on 10 times the company’s earnings before interest and taxes, with some adjustments, but how those earnings were calculated was at the centre of the dispute.
A trial in a Delaware court was expected to start on Monday. However, in a statement late on Sunday, Berkshire said it “reached an agreement to fully settle the Delaware litigation, including all claims and counterclaims”. Details of the settlement were not disclosed.
Pilot, which also operates Flying J, sells fuel, food and merchandise to truckers and provides showers among other services. The Knoxville-based business is the largest business of its kind in America with more than 750 locations in the US and Canada and 30,000 employees.
The acquisition by Berkshire, whose related interests include car insurer Geico and dealership Berkshire Hathaway Automotive, was regarded as a vote of confidence in the US economy and more particularly in the traditional transport sector, despite the rise of electric vehicles.
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