The man is Warren Buffett.
Rick Wilking.
Warren Buffet was invited to buy a piece of the donut shop, but he didn't bite.
The investor's love of sweet products and strong brands has led to his conglomerate owning See's Candies, Dairy Queen and Coca-Cola. The investor passed on the company for a number of reasons, but it seemed like a natural fit.
The donut seller tried to stop a hostile takeover by Knightsbridge Capital in 1989. The board wanted to raise cash to buy back stock and to get the support of a long-term investor who would vote with them.
"We all agreed that he would be perfect, and I learned a lot from him," said Robert Rosenberg, the former CEO. Alex Morris, an investment researcher, highlighted the story this week.
He believed that Dunkin' was a good fit for the criteria thatBuffett liked retail franchises with strong brands that acted as "moats" against competition. He recalled that he sent the offer to Martha Stewart, who was visiting at the time, because he wanted to buy $35 million of preferred stock.
The investor turned down the invitation. "I don't buy in the middle of a takeover fight because the deal isn't large enough for me," he said.
"We were very disappointed, but luckily that didn't last long, as General Electric Credit accepted the deal a few days after the rejection by Buffet," he wrote.
It's no surprise that he didn't invest in the company. He's avoided bidding wars over companies throughout his career because they tend to drive up prices and foster ill will. A $35 million deal would have barely moved the needle at the company, which generated close to $400 million in operating income in 1989.
Baskin-Robbins owner Allied Lyons acquired Dunkin' in 1990. The chain's private-equity group included Bain Capital and Carlyle Group. It was sold for more than $11 billion in 2020.
Business Insider has an original article.
