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The Heinz deal: Something's hinky

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Saturday, Feb. 16, 2013, 9:00 p.m.
 

As reports have it, the dealmaking leading to Thursday's announcement that iconic U.S. investor Warren Buffett, though his Berkshire Hathaway company, would team up with increasingly influential Brazilian money man Jorge Paulo Lemann, through his 3G Capital company, to purchase the legendary H.J. Heinz Co. of Pittsburgh for $28 billion was shrouded in secrecy.

The players negotiating the largest acquisition ever in the food industry even went as far as using code names for one another. Mr. Buffet was “Owl.” Mr. Lemann was “Goose.” And the “Heinz” name was not to be uttered; its nom de guerre first was “Penguin” but became “Hawk” when the suitors could not remember the former, The New York Times reports.

Which makes what was happening on Wall Street at the same time all the more troubling: Options trading in Heinz stock soared on Wednesday. So much so that the Securities and Exchange Commission has opened an insider trading investigation.

Oh, and just coincidentally, Lemann's 3G already is the subject of an SEC insider trading investigation involving the company's takeover of Burger King. That case centers on a Wells Fargo employee allegedly receiving inside information from a 3G investor. That employee's assets were frozen pending an investigation. No charges have been filed.

The inquiry into the spike in Heinz options trading is no small matter. And given that the circle of people knowing of this pending deal supposedly was small and at the highest levels, more than a shadow could be dogging the Heinz takeover.

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