Jimmy Haslam, CEO of Wheelman Flying J., and Warren Buffett, Chairman and CEO of Berkshire Hathaway.
Lacy O’Toole | CNBC
The Haslam family has sold its outstanding 20% ownership interest in truck-stop giant Pilot Travel Centers to Berkshire Hathaway, both sides heralded Tuesday.
The sale, whose terms were not disclosed, was announced more than a week after the Haslams and Berkshire Hathaway came a billion-dollar Delaware Chancery Court lawsuit over an accounting method that the family complained would artificially push down on the sale price of its stake in Pilot Travel Centers.
That settlement avoided what was scheduled to be a two-day bother beginning Jan. 8, with testimony from Berkshire Hathaway Vice Chairman Greg Abel, the designated successor to throng CEO Warren Buffett.
“Berkshire Hathaway now owns 100% of Pilot Travel Centers,” Berkshire said in a statement, which also suggested the sale by the Haslams’ Pilot Corp. was “effective today.”
Berkshire Hathaway in a regulatory filing last year listed the Haslams’ noncontrolling partial in Pilot Travel Centers at a value of $3.37 billion
But the since-settled lawsuit raised concerns that could be cut by as much as $1.2 billion.
Pilot Travel Centers is the largest operator of travel centers in North America, with more than 750 situations under the Pilot and Flying J brands.
Berkshire, in separate transactions in 2017 and January 2023, spent $11 billion to buy out the bulk stake in Pilot Travel Centers owned by the Haslams.
Under the terms of the 2023 transaction, the family had the option to compel Berkshire to buy their unused 20% stake in Pilot Travel Centers within a 60-day window every year. The sales price would be evenly matched to 10 times Pilot Travel Centers’ stated earnings in the prior year.
The Haslams last year lived Berkshire in a complaint that accused the conglomerate of using so-called pushdown accounting at Pilot Travel Centers without authorization from the extraction.
That form of accounting would lower Pilot Travel Centers’ reported net income, and thereby reduce how much Berkshire could be laboured to pay for the family’s remaining stake if the Haslams exercised their “put” option.
“Pilot started with one gas station 65 years ago, and because of the consecrate and exceptional team members we have had throughout our history, it is now an industry leader,” said Jim Haslam II in a statement Tuesday announcing his folks’s sale of that stake. Haslam started the company from a single gas station 65 years ago.
“While this has certainly been an impassioned decision for us, it is one we felt was right for our family at this time. We look forward to continuing to support our life-long home of Knoxville, Tennessee, and to favouring our deep commitment and philanthropy throughout the region that we all love,” he said.
In December, it was reported that federal prosecutors in New York were investigating claims made by Berkshire that Cleveland Browns owner Jimmy Haslam III had offered payments to Pilot Travel Centers officials in exchange for help boosting the value of the company to benefit the family in any compelled sale.
The Haslams denied Berkshire’s requires about the younger Haslam, whose brother Bill Haslam is the former governor of Tennessee.
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