FBI to investigate Heinz takeover

HJ Heinz Co Ltd, Kitt Green
HJ Heinz Co Ltd, Kitt Green

A CRIMINAL investigation has been launched into alleged suspect business activity ahead of the Heinz takeover deal last week.

The Federal Bureau of Investigation (FBI) is looking into reports of unusual trading the day before Berkshire Hathaway and 3G Capital announced it was taking over the Wigan-based factory in a $23bn deal.

The US financial regulator, the Securities and Exchange Commission (SEC), is already suing unnamed traders, accusing them of insider dealing.

It last week froze assets held in a Swiss bank account, believing some traders knew about the takeover before it was announced and made $1.7m from the knowledge.

The traders in question made risky bets that Heinz’s stock price would increase, using financial instruments called options. After the official announcement of the deal, Heinz’s share price rose by 20 per cent.

Daniel Hawke, SEC’s head of the market abuse unit, said: “Irregular and highly suspicious options trading immediately in front of a merger or acquisition announcement is a serious red flag that traders may be improperly acting on confidential non-public information.”

There is no implication that Heinz or its new owners have committed any wrongdoing.

The SEC said a bank account at Goldman Sachs was used. Goldman Sachs has said it is co-operating with the investigation.

A spokesman for the FBI said: “The FBI is aware of trading anomalies the day before Heinz’s announcement. The FBI is consulting with the SEC to determine if a crime was committed.”

Heinz declined to comment.

The take-over was announced on Thursday, February 14, sparking MPs Lisa Nandy and Yvonne Fovargue to meet with bosses at the Kitt Green plant to determine what the sudden global takeover means for employees.

The takeover is the biggest in food history and the man behind it all - Warren Buffett - was once the richest person in the world.

The takeover has been approved by the company’s board but still needs to be voted on by shareholders.