Berkshire To Buy Dairy Queen
Oct. 21, 1997
MINNEAPOLIS (AP) _ Warren Buffett's Berkshire Hathaway Inc. announced Tuesday it is buying International Dairy Queen Inc. for $585 million worth of Berkshire stock.
Minneapolis-based Dairy Queen would become a wholly-owned subsidiary of Berkshire Hathaway. John Mooty, Dairy Queen's 74-year-old chairman, said his family's 35 percent stake will vote in favor of the deal, which is expected to close late this year or early next year, the companies said.
Holders of Dairy Queen common stock can receive either $27 in cash or $26 in Berkshire Hathaway common stock, but Berkshire won't pay more than 55 percent of the price in cash.
``Our family will vote our entire 35 percent of the voting shares of Dairy Queen in favor of the merger and will elect to receive Berkshire common stock for all the Dairy Queen shares owned by us,'' said Mooty, Dairy Queen board chairman.
``I personally consider Berkshire shares to be one of the finest investments that our family could make, and we anticipate holding the shares indefinitely,'' Mooty said.
Dairy Queen's stock rose $2.62 1/2 to $26.75 on the Nasdaq Stock Market. Berkshire Hathaway stock, meanwhile, rose about 1 percent.
``Dairy Queen is a business that I like, run by an outstanding management team. Dairy Queen will be a great addition to the Berkshire family,'' Buffett said.
The 57-year-old Dairy Queen helped revolutionize the ice cream world with its soft frozen dessert dispensed directly from a freezer. The company develops, licenses and services more than 5,790 Dairy Queen stores and about 410 Orange Julius stores in the United States, Canada and other countries, along with 45 Karmelkorn shoppes.
Dairy Queen recently reported that is profits in the quarter ended Aug. 29 rose 7.8 percent and that nine-month profits were up more than 13 percent.