Warren Buffett’s Berkshire Hathaway Inc. is providing $3 billion of financing for Burger King Worldwide Inc.’s planned takeover of Tim Hortons Inc. and will earn 9 percent annual interest on the investment.

Berkshire is taking a preferred equity stake and won’t be involved in managing the restaurant business, according to a statement today from Burger King. Buffett has previously injected capital into financial firms like Goldman Sachs Group Inc. and Bank of America Corp. at times of crisis, and helped fund deals such as Mars Inc.’s purchase of Wm. Wrigley Jr. Co.

The latest transaction helps Buffett deploy some of Berkshire’s mounting cash pile, which grew to a record $55.5 billion at the end of June. It also deepens his company’s relationship with Jorge Paulo Lemann’s 3G Capital, which controls Miami-based Burger King. Buffett teamed up with Lemann’s firm last year to to takeHJ Heinz Co. private.

“3G does a magnificent job of running businesses,” Buffett said in May at his company’s annual meeting in Omaha.

Burger King today said it would acquire the Oakville, Ontario-based coffee-and-doughnuts chain for about C$12.5 billion ($11.4 billion) in a deal that creates the third-largest fast-food company and moves its headquarters to Canada.

Buffett has shunned bets in publicly traded bonds with yields near record lows, preferring deals in which his reputation and the size of the cash hoard allow Berkshire to lock in better rates than those available to other investors.

David Fuller's view

We are never too old to learn from Warren Buffett, and his long-term investors know a thing or two as well.  Berkshire Hathaway shares are not cheap at an estimated p/e of 20.26, according to Bloomberg, and no yield but they remain in form.

What else can we learn about the Oracle of Omaha’s views from this article?

In what is obviously no surprise, I would say that his investment philosophy remains consistent.  Additionally, he does not like publicly traded bonds as you can see from the last paragraph of Bloomberg’s report shown above.  Lastly, while he likes equities, Buffet is in no doubt that the US stock market is somewhat expensive, judging from Berkshire’s record $55.5 billion in cash at the end of June.  He is presumably waiting for bargain opportunities which will be created by the next significant Wall Street correction.