The Haslam family, owners of Pilot Travel Centers, the top truck stop operator in the US, has sold their remaining 20% stake to Berkshire Hathaway. This agreement, allowing for the sale, was made within the first two months of 2024. The exact terms of the deal were not disclosed, but the sale price may be revealed in Berkshire Hathaway’s annual report, slated for release in late February or early March.
Considering Berkshire Hathaway’s valuation of the 20% stake from a year ago, the Haslam family stands to gain an estimated $3 billion from this sale. Previously, they earned approximately $11 billion from the sale of the first 80% of Pilot Travel Centers.
The settlement agreement, based on negotiations conducted earlier this month, set the terms for this transaction, according to Berkshire Hathaway.
Pilot Travel Centers currently operates over 750 travel centers across the United States and Canada. Prior to this acquisition by Berkshire Hathaway, it stood as one of the largest private companies in America. Additionally, it is worth noting that the Haslam family is the majority owner of the Cleveland Browns.
Berkshire Hathaway’s acquisition of Pilot Travel Centers took place in three stages. They made an initial purchase of nearly 40% in 2017, followed by an additional sale of just over 40% in early 2023. Now, with this recent transaction, they have acquired the remaining 20% as per the Haslams’ option.
The Haslams vs Berkshire: A Turn for the Worse
In late 2023, what was once an amicable relationship between the Haslams and Berkshire took a sour turn. The Haslams filed a lawsuit against Berkshire, accusing them of attempting to underpay the family for the remaining 20% stake in Pilot Travel Centers. This alleged underpayment was supposedly achieved by changing the accounting for Pilot Travel Centers without obtaining permission from the Haslams.
Berkshire retaliated by claiming that Jimmy Haslam, the CEO of Pilot Corp, had promised undisclosed side payments to executives at Pilot Travel Centers in order to artificially inflate Pilot’s earnings for 2023. This was done to maximize the value of the remaining 20% stake, which was to be determined based on the earnings for that year.
Pilot Corp swiftly dismissed Berkshire’s allegations against Jimmy Haslam, stating that they lacked any merit.
The dispute seemed destined for a trial in Delaware until both parties decided to drop the litigation and all associated claims and counterclaims in early January.
Interestingly, a potential resolution to the conflict had arisen back in October. Big Jim Haslam, the founder of Pilot, who is 93 years old, reached out to Warren Buffett, the 93-year-old CEO of Berkshire, by phone. According to Pilot’s initial lawsuit in October, it appeared that the two had reached an oral agreement. However, despite these efforts, no deal materialized, leading to the subsequent litigation.