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Some Heinz investors sell stock too early, miss boat on share price for company's sale

Andrew Russell | Tribune-Review
The historic smokestacks at the Heinz plant are seen from Troy Hill Road, Thursday. Warren Buffett's company, Berkshire Hathaway and a Brazilian firm, 3G made a $23.2 billion cash offer to buy H.J. Heinz Co. Photo taken February 14, 2013.

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Thursday, Feb. 14, 2013, 11:34 p.m.
 

Investors large and small, including Secretary of State John Kerry and two area retirees, missed cashing in on the sale of H.J. Heinz Co.

Kerry, who is married to Teresa Heinz Kerry, heir to the ketchup fortune, sold holdings in the company worth at least $4.2 million in November, financial disclosure filings show.

Kerry had held about that much in H.J. Heinz shares, according to a 2011 estimate by OpenSecrets.org, which analyzes government financial disclosures. It estimated his net worth at about $184.3 million that year, the latest figure available.

Heinz retiree Duane Buzelli would like to have back the shares of stock he sold more than two decades ago.

“I sold about 200 shares for $45 a share about 26 years ago,” said Buzelli, 67, of McCandless. “It was always considered the safest stock. ... If I had about 100 shares ... oh boy,” he said.

“A lot of (retirees) didn't keep their stock,” said Bill Pozega, who worked at the company for 36 years. “They sold it to help their kids start businesses or get out of trouble.”

Pozega, 74, of Ross sold “a couple of grand” worth of stock some years ago. “If I win the lottery ..., ” he said with a laugh.

Usually, investors never expect to sell at the top. Some can say they did so with the sale of Pittsburgh-based Heinz.

Heinz's agreement on Thursday to sell to Berkshire Hathaway and 3G Capital for $72.50 a share is 19 percent higher than the food company's record of $60.95 on Monday, and 20 percent more than Heinz's closing share price on Wednesday of $60.48.

The biggest shareholders will profit the most.

CEO William Johnson would realize about $100.1 million if he sold his total holdings, and he'll keep his job.

Johnson, 64, held 1.38 million Heinz shares as of Dec. 17, according to securities filings compiled by Bloomberg News. But he ranks as only the 31st-largest shareholder.

On Thursday, Johnson's stake rose in value by about $17.5 million over its value when reported.

Blackrock Inc., the New York investment firm that is about one-quarter owned by PNC Financial Services Group Inc. of Pittsburgh, holds about 23.6 million shares for itself and investment clients, a 7.37 percent stake. Other top holders are Vanguard Group Inc., the mutual fund company, with a 4.38 percent stake, and The Bank of New York Mellon Corp., the nation's largest custody bank, with a 3.83 percent stake. Those financial companies hold custody of shares of many companies for institutional and individual investors.

Heinz Kerry holds an unknown personal stake in the company, but she controls assets at the Heinz Endowments, where she is chairwoman. Her personal wealth has been estimated at $500 million to $1 billion.

In 1996, the Heinz Endowments sold most of its Heinz stock, said spokesman Doug Root. As of Dec. 31, the foundation's holdings in Heinz represented about 1.2 percent of its total assets of $1.43 billion, worth $17.1 million, Root said.

There is no connection between the food company and the Heinz Endowments, except as holder of the stock, and the foundation's mission of philanthropy will remain unchanged, Root said.

Kerry's wealth pales in comparison with that of his wife. She inherited her fortune from her previous husband, Sen. John Heinz, the late Pennsylvania Republican and heir to the family food fortune, who was killed in a 1991 helicopter-airplane crash. She married Kerry in 1995.

The sale of Kerry's shares was reported on Dec. 11 to the Senate Office of Public Records under a new disclosure requirement that took effect last year. The former Massachusetts senator was confirmed as secretary of State on Jan. 29 and sworn in on Feb. 7.

The Boston Globe reported last month that the couple planned to sell nearly 100 holdings to avoid conflicts of interest. Heinz was not named among the companies they planned to sell.

Other recognizable Pittsburgh names with publicly available holdings in Heinz include board of directors members Lynn Swann, the former Steeler; Charles E. Bunch, CEO of PPG Industries; and former U.S. Steel Corp. CEO Thomas J. Usher.

As of April 30, Bunch owned 26,000 shares, which would have been worth $1.57 million on Wednesday and $1.88 million on Thursday after the deal was announced. Swann would gain $138,276; Usher, $550,000.

Activist shareholder Nelson Peltz also missed Thursday's big gain. He said in an interview with CNBC that he sold his stake, which was as high as 18 million shares in August 2006. That year Peltz won a seat on the Heinz board in a highly publicized proxy fight.

Peltz sought five board seats but won positions only for himself and Michael Weinstein. He used that clout to lobby for changes to increase profits and the Heinz stock price, which had been lagging.

Trib Total Media staff writer Craig Smith contributed to this report. Staff writer John D. Oravecz can be reached at 412-320-7882 or joravecz@tribweb.com.

 

 
 


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