Winters Warns Against Sweetheart Deal

David Winters, a Coca-Cola shareholder, recently raised up a ruckus over the new company incentive plan put forth back in April. He is up to his old tricks again, and this time he is accusing Warren Buffett of plotting to take Coca-Cola private.

In a letter to the Board of Directors at Coca-Cola, Winters said that he is worried that Buffett and Berkshire Hathaway could possibly be planning a “sweetheart” deal, enriching management and Buffett himself. Berkshire Hathaway is the largest shareholder of the beverage company, and Warren Buffett responded on CNBC basically telling us that there’s no chance it would ever happen. Coca-Cola’s current market value is $180 billion.

Winters is basing these allegations on reports in the media that suggest the Oracle of Omaha is thinking about buying out Coca-Cola with 3G Capital, the private equity firm that Berkshire Hathaway teamed up with when buying Heinz. He believes they will use their Heinz takeover as a way to model the Coca-Cola takeover deal, we learned according to the letter. This would lead to a sale that had no competing offers.

“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,” said Winters, CEO of Wintergreen Advisers LLC.

This most recent dispute follows Winter’s campaign against Coca-Cola and its new stock compensation policies, which he believes was much too excessive and dilutive to shareholders. He even urged the Omaha-based Berkshire Hathaway CEO, Warren Buffett, to oppose the program. Buffett chose not to vote against the compensation proposal in the last April’s meeting, but he did criticize the plan once it passed.

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