Conglomerate General Electric Co. (GE: Quote) revealed Tuesday in a regulatory filing that it will buy back the entire preferred stake billionaire Warren Buffett's Berkshire Hathaway, Inc. (BRKa,BRK-A: Quote,BRK-B: Quote) acquired during the worst of the 2008 financial crisis.
According to a form 8-K filing with the U.S. Securities and Exchange Commission, GE said it has mailed notices of redemption to Berkshire Hathaway stating that it would redeem in full the preferred shares held by Berkshire.
Fairfield, Connecticut-based GE noted it will buy back the stake at the stated redemption price of $3.3 billion, which includes the guaranteed 10 percent redemption premium, plus accrued and unpaid dividends to the redemption date. GE has set the redemption date for October 17, 2011.
Berkshire bought in October 2008 $3 billion of GE's preferred stock at a guaranteed 10 percent dividend that are callable by 2011. It also gave Berkshire warrants to purchase $3 billion of GE's common stock at a strike price of $22.25 per share. The warrants were exercisable at anytime through 2013.
Earlier, Buffett sold his entire holding of 5 million shares in Bank of America in mid-February.
Buffett, who invested in General Electric and Goldman Sachs during the 2008 financial crisis, agreed two weeks ago to invest in beleaguered lender Bank of America (BAC) by acquiring $5 billion worth of preferred shares in it, making Buffett one of BoA's largest shareholders.
Buffett made the invest in GE at a time when trouble at its GE Capital finance arm threatened to pull down the entire company.
GE closed Tuesday's regular trading session at $15.41, up $0.40 or 2.66 percent on a volume of 83.30 million shares.
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by RTT Staff Writer
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