The Work

February 4, 2009 4:17 PM

Foley Helps Harley-Davidson Connect with Buffett

Posted by Zach Lowe

Warren Buffett owns $85 billion in corporate debt and stock, so his decision Tuesday to have Berkshire Hathaway buy up $300 million in Harley-Davidson securities isn't huge for him. But it could be huge for the iconic motorcycle company, which just posted a quarterly profit lower than any it has posted in the last nine years, according to Bloomberg. The company's financing unit also is in need of capital. 

So Harley turned to Buffett, who helped recapitalize Goldman Sachs in September when he invested $5 billion in the ailing banking giant. And Harley is paying a high price for the kind of investor confidence Buffett can bring--a 15 percent interest rate on the issued securities.

According to this filing with the Securities and Exchange Commission, Harley turned to Foley & Lardner for advice in arranging the debt purchase with Buffett. A Foley spokesman did not respond to phone or e-mail messages seeking comment on the deal. (It's been a big couple of weeks for Foley; firm partner Mary K. Braza helped Chicago billionaire Tom Ricketts win the scramble for the Chicago Cubs with a bid of about $900 million.) 

We also didn't get word (yet) from Robert Denham, the Munger, Tolles & Olson partner who advised Buffett and Berkshire on the Goldman Sachs deal (for which Denham was named our Dealmaker of the Week). As that Dealmaker story pointed out, Munger has been Buffett's preferred firm since founding partner Charles Munger went to work at Berkshire Hathaway in 1965; Munger worked in a supermarket owned by Buffett's father as a teenager. We bet that few supermarket jobs have led to such grand fortunes.

A longtime Harley investor, Davis Select Advisers, also purchased $300 million of Harley debt. The company hopes to raise about $1 billion in capital through debt exchanges, it said in a statement.

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