The poet and essayist Ralph Waldo Emerson wrote, "A foolish consistency is the hobgoblin of little minds." For poetry, this aphorism is most apt. For all those politicians and other n'eer-do-wells who have used it, I am not sure. That won't stop me from using it, tongue in cheek, for Warren Buffett's offer to finance 3G Capital Partner's buyout of Tim Hortons.
Tim Hortons, owned by Wendy's, was used side-by-side with a Wendy's, as a way of adding a bigger breakfast day part to Wendy's and adding some real estate synergy to the combined menu offerings of the two restaurants. It didn't seem to work, and now it's for sale.
We've written in this blog about Buffett's long relationship with Brazilian-led 3G Capital Partners which was behind its stepping up to help finance the purchase of Heinz, and about how that relationship would be a new model for Berkshire going forward, i.e. partnering with private equity to do bigger, better, and faster returning deals than BRK's working on its own. Here is an example in this deal, and it sounds like it should work out well for the preferred holder, as that instrument has borne much fruit recently, as exemplified by the Goldman deal.
What is rather funny is the philosophical inconsistency being shown by the Oracle of Omaha. Standing ideologically cheek-by-jowl with President Obama, we heard much puffery about not minding paying more taxes, his secretary's paying more than Mr. Buffett, yada-yada.
Now BRK will help 3G and itself to make a productive investment via a tax inversion to our Canadian neighbors to the north. The PR firms will all make the mild outrage go away. President Obama will call Omaha, ask for a bigger campaign contribution, and say he expressed his displeasure to Mr. Buffett. What could be more consistent?
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