Buffett group buys a stake in Outback

TAMPA -- Outback Steakhouse Inc. has a fan in Omaha.

Berkshire Hathaway Inc., billionaire Warren Buffett's investment group, purchased nearly 1.9-million shares of the Tampa company's stock in early 2001. At Outback's closing price of $35.41 on Thursday, those shares would be worth $66.1-million.

To Berkshire, whose combined holdings were worth $28.1-billion as of Dec. 31, that's a drop in a bucket. But the disclosure could be a boon to Outback. Buffett, an investing guru who buys stock of companies he thinks are bargain-priced, is capable of causing mass exoduses into or out of those companies.

So much so, in fact, that Berkshire's disclosures to the Securities and Exchange Commission are kept confidential for some time before they are revealed to the public. The Omaha, Neb., company's 2001 stock holdings became public Thursday. Among the companies Berkshire controls are Dairy Queen and GEICO, an insurance company.

Separately, Outback disclosed Thursday that it may be sued soon, due to a German franchise arrangement that soured.

According to a filing with the SEC, Outback terminated three franchise deals with Helvag AG in April after the German company defaulted on the agreements. Outback's name was subsequently stripped from the restaurants.

A former partner in one of the restaurants told Outback he intends to file suit against it for damages. Outback said it believes the claims are "without merit" and will not materially harm the company.

In an apparently unrelated development, Outback said German authorities arrested Helvag executives in August on allegations of securities fraud.

-- Scott Barancik can be reached at barancik@sptimes.com or (727) 893-8751.

© 2006 • All Rights Reserved • St. Petersburg Times
490 First Avenue South • St. Petersburg, FL 33701 • 727-893-8111

Contact the Times | Privacy Policy
Standard of Accuracy | Terms, Conditions & Copyright