Even for Warren Buffett, $777 million would probably be a pretty good day's work.
Berkshire Hathaway Inc., the holding company run by the billionaire, may realize that much in paper profits in a single day from Procter & Gamble Co.'s purchase of Gillette Co.
Berkshire is Gillette's biggest shareholder. Its 96 million shares give it a roughly 9 percent stake in the company.
The merger terms, announced Friday, call for Cincinnati-based P&G to swap 0.975 of a share for each Gillette share, valuing Boston-based Gillette at $53.94 a share, based on Thursday's closing share prices.
The premium of $8.09 over Gillette's Thursday closing share price would represent a $776.6 million one-day paper profit on 96 million shares.
That's enough for Buffett to visit one of the nine Walgreen's in Berkshire's Omaha, Nebraska, hometown, and buy a top-of-the-line Gillette M3Power razor, at $11.99, plus about 283 million replacement cartridges, at $10.99 per four-pack.
Walgreen Co. is the largest U.S. drugstore chain.
Berkshire paid $600 million for its Gillette shares, according to its most recent annual report, giving it a total profit from its investment of more than $4 billion.
The stock swap would give Buffett 93.6 million shares in the combined company.
But Buffett has no plans to sell any of the shares. In statement, he said he would raise that stake by 7 percent to 100 million shares, requiring an investment of more than $300 million.
"This merger is going to create the greatest consumer product company in the world," Buffett said. "It's a dream deal."
Buffett, the world's second-richest person according to Forbes magazine, might personally also have something to gain.
According to a recent securities filing, he owns 474,998 Berkshire Class A common shares, worth about $42.1 billion based on Thursday closing share price of $88,650.
An increase in the value of those shares resulting from the Gillette purchase would increase Buffett's net worth.
According to a U.S. regulatory filing, Buffett is also trustee for another 1,104 Berkshire Class A shares, but disclaims any economic interest in them. The estate of his late wife, Susan, owns 31,530 Class A and 177 Class B shares.
