Berkshire Hathaway Acquires Remaining Stake in Pilot Travel Centers

Berkshire Hathaway has completed the purchase of the remaining 20% stake in Pilot Travel Centers from the Haslam family, solidifying its position as the leading operator of truck stops in the United States. The sale, which was allowed within the first two months of 2024, was confirmed by both the Haslam family and Berkshire Hathaway.

Although the exact terms of the agreement were not disclosed, Berkshire Hathaway may reveal the sale price in its upcoming annual report, expected to be released in late February or early March. Based on the valuation of the 20% stake a year ago, it is estimated that the Haslam family could potentially earn around $3 billion from this transaction. This would add to the approximately $11 billion they received from the sale of the initial 80% of Pilot Travel Centers.

The terms of the sale were based on a settlement agreement that had been reached between Berkshire Hathaway and the Haslam family earlier in January.

Pilot Travel Centers currently operates over 750 travel centers throughout the United States and Canada, positioning itself among the largest private companies in the country. It is worth mentioning that the Haslam family is also the majority owner of the Cleveland Browns football team.

This acquisition by Berkshire Hathaway marks the final stage of a three-step deal that began in 2017 when Berkshire initially purchased nearly 40% of Pilot Travel Centers. This was followed by an additional sale of just over 40% in early 2023, and finally concluded with the acquisition of the remaining 20% at the option of the Haslam family in early 2024.

The Contentious Battle Between the Haslams and Berkshire

The once harmonious relationship between the Haslam family and Berkshire Hathaway has taken a bitter turn. In late 2023, the Haslams filed a lawsuit against Berkshire, accusing them of attempting to underpay for the remaining 20% stake in Pilot Travel Centers by altering the accounting without consent.

Berkshire, on the other hand, retaliated by claiming that Jimmy Haslam, CEO of Pilot Corp, had made secret side payments to boost Pilot's 2023 earnings artificially. This, Berkshire alleged, was a ploy to maximize the value of the stake in question. Pilot Corp vehemently denied these allegations made against Jimmy Haslam.

The legal battle was expected to reach trial in Delaware until both parties reached an agreement in early January. They decided to drop all litigation, including the claims and counterclaims that had been made.

Interestingly, the dispute might have been resolved back in October when Big Jim Haslam, the founder of Pilot, personally contacted Warren Buffett, the CEO of Berkshire Hathaway. Both men, now in their nineties, appeared to have reached an oral agreement according to Pilot's initial lawsuit. However, no formal deal was reached, leading to the subsequent litigation.

It is worth noting that Big Jim Haslam is the father of Jimmy Haslam, adding an extra layer of complexity to the family dynamics involved in this feud.

Written by Andrew Bary.