Updated from 9:51 a.m. EDT with dividend on Berkshire preferred stake and analyst commentary
NEW YORK (TheStreet) -- Berkshire Hathaway's (BRK.A) Warren Buffett has once again found a deal that is too juicy to pass up in Burger King Worldwide's (BKW) proposed takeover of Canadian coffee-chain Tim Hortons (THI) . Buffett has agreed to finance a piece of the deal by making a $3 billion preferred stock investment in Burger King that will carry a dividend yield of 9%.
The preferred stock deal represents yet another investment that is available only to Buffett and Berkshire's shareholders and is out of reach for most investors. Berkshire's financing commitment will supplement $9.5 billion Burger King is raising from bond markets to buy Tim Hortons for 89.32 Canadian dollars ($81.47) a share, in a cash and stock deal that will give Brazilian private equity firm 3G Capital a 51% ownership stake in the combined company.
Deals like the Burger King preferreds are common for Berkshire Hathaway. During the financial crisis, Berkshire made billions of dollars loaning money to the likes of Mars, Goldman Sachs (GS) , General Electric (GE) , Swiss Re (SREN) , Dow Chemical (DOW) and later Bank of America (BAC) through large preferred investments.
Berkshire supplied Goldman with $5 billion in a preferred deal that paid a 10% dividend. A $3 billion deal with GE also carried a 10% dividend yield, and a $5 billion Bank of America deal carried a 6% dividend yield. Berkshire also supplied Swiss Re with CHF 3 billion ($3.28 billion) at a 10% dividend yield, and Dow Chemical, $3 billion at an 8.5% dividend yield.