Should You Hold Out for the Last Dollar?: Dell Inc. (DELL), H.J. Heinz Company (HNZ)

The fact is that Heinz’ price peaked during the dot-com bubble at a little over $53/share. The $60 being bid before the deal was a lot more than that, and the $72.50 being offered by Berkshire-Hathaway (BRK-A) and its partners is a 20% premium on that. Yes, shareholders will miss that fat yield of 2.86%, but they’re being more than amply rewarded here.

The roughly $12.5 billion in cash Buffett is putting into the deal is almost a quarter of what’s on hand, and most of the risk here is on 3G, which bought Burger King a few years ago and may or may not have what it takes to earn a further premium here.

You know what I might do in response to this deal? Buy some Campbell Soup Company (NYSE:CPB). Campbell’s management considers this deal a “wake-up call” and is almost certain to respond with some moves toward greater efficiency. Watching 3G may inspire others to make a run at Campbell’s, which is still controlled by the founding Dorrance family. I think you’re better off speculating on that than waiting for the extra 37 cents from Buffett.

Don’t Play for Pennies

As the Austin Lounge Lizards sang in their The Me I Used to Be, “just like every fool day trader I thought I was a corporate raider!” You don’t want to be that guy. It always ends in tears.

When you invest you want to understand your limits, understand the time value of money, and leave everything else to the experts. When someone offers you a premium for a company, whether it’s something you’re making money on or losing, take the money and walk away.

The article Should You Hold Out for the Last Dollar? originally appeared on Fool.com and is written by Dana Blankenhorn.

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