Jimmy Haslam, CEO of Pilot Flying J., and Warren Buffett, Chairman and CEO of Berkshire Hathaway.
Lacy O’Toole | CNBC
The Haslam family has sold its remaining 20 percent stake in truck stop giant Pilot Travel Centers to Berkshire HathawayBoth sides announced on Tuesday.
The sale, terms of which were not disclosed, was announced more than a week after the Haslams and Berkshire Hathaway settled a multibillion-dollar lawsuit in Delaware Chancery Court over an accounting method that the family claimed that it would artificially depress the selling price of its shares in Pilot Travel centers.
The agreement avoided a two-day trial that was scheduled to begin Jan. 8 and at which Berkshire Hathaway Vice Chairman Greg Abel, the designated successor to Warren Buffett, the company’s CEO, testified.
“Berkshire Hathaway now owns 100% of Pilot Travel Centers,” Berkshire said in a statement, which also said the sale by Haslams’ Pilot Corp. is “effective today”.
Berkshire Hathaway listed the Haslams’ minority stake in Pilot Travel Centers as valued at $3.37 billion in a regulatory filing last year
But the now-settled legal dispute raised concerns that a cut of up to $1.2 billion was possible.
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Pilot Travel Centers is the largest travel center operator in North America with more than 750 locations under the Pilot and Flying J brands.
Berkshire spent $11 billion in separate transactions in 2017 and January 2023 to buy out the majority stake in Pilot Travel Centers owned by the Haslams.
Under the terms of the deal in 2023, the family had the option to force Berkshire to buy its remaining 20% stake in Pilot Travel Centers within a 60-day window each year. The selling price would be equal to 10 times Pilot Travel Centers’ reported profit last year.
The Haslams sued Berkshire last year in a lawsuit accusing the conglomerate of using so-called pushdown accounting at Pilot Travel Centers without the family’s authorization.
This form of accounting would reduce Pilot Travel Centers’ reported net income and thereby reduce the amount Berkshire would have to pay for the family’s remaining share if the Haslams exercised their “put” option.
“Pilot started with a gas station 65 years ago and is now an industry leader because of the dedicated and exceptional team members we have had throughout our history,” Jim Haslam II said in a statement Tuesday announcing the sale of this stake through his family announced. Haslam founded the company 65 years ago with a single gas station.
“While this was certainly an emotional decision for us, we feel it was right for our family at this time. “We look forward to continuing to support our lifelong home in Knoxville, Tennessee, and continuing our deep commitment to philanthropy throughout the region that we all love,” he said.
In December, it was reported that federal prosecutors in New York were investigating allegations made by Berkshire that Cleveland Browns owner Jimmy Haslam III offered payments to Pilot Travel Centers executives in exchange for help increasing the company’s value to benefit the family in all cases increased sales.
The Haslams disputed Berkshire’s claims about the younger Haslam, whose brother Bill Haslam is the former governor of Tennessee.
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