Buffett's Berkshire Confirms Purchase of Goldman Stake

Tuesday, 08 Oct 2013 05:52 PM

 

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Warren Buffett's Berkshire Hathaway Inc. disclosed a 2.8 percent passive stake in Goldman Sachs Group Inc. as it converted warrants acquired during the financial crisis.

Buffett received the warrants five years ago when his investment in Goldman was seen as a vote of confidence in the bank, which was reeling from turmoil in the credit market.

Under Buffett's deal with Goldman, Berkshire had the right to buy about 43.5 million Goldman shares — or a roughly 9 percent stake then — at an exercise price of $115 per share.

Goldman had amended the deal in March, which gave Berkshire a much smaller stake but did not require it to commit any capital to exercise the warrants.

Reuters reported last week that Berkshire would convert the warrants into shares equal in value to the difference between the warrants' exercise price and the average closing price for Goldman shares in the 10 trading days up to Oct. 1.

The billionaire investor disclosed the stake of 13.06 million shares as of Oct. 1 in a regulatory filing late on Tuesday.

The stake, valued at about $2 billion based on Goldman's Tuesday close of $153.05, makes Berkshire the sixth-largest external investor in the bank, according to Thomson Reuters data.

© 2014 Thomson/Reuters. All rights reserved.

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