Tags: Buffett | Dow | Chemical | Stake

Buffett's $3 Billion Dow Chemical Stake May Be Repaid After Kuwait Case

Thursday, 26 Jul 2012 06:58 AM

 

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Warren Buffett’s investment in Dow Chemical Co., which generated $255 million a year for his Berkshire Hathaway Inc., may be redeemed with proceeds the chemical maker will get as part of a legal dispute with Kuwait.

Dow Chief Executive Officer Andrew Liveris said on a conference call that the award may be used to improve the company’s finances. Asked about preferred shares, which include $3 billion held by Berkshire and $1 billion that were sold to Kuwait’s sovereign wealth fund, the CEO said, “that’s the balance sheet, and I would say it’s included.”

Dow sold the securities to help fund the 2009 purchase of Rohm & Hass Co. The preferred shares pay an 8.5 percent annual dividend. The yield is about 4 percentage points higher than on Dow’s 30-year notes due in 2041, according to data compiled by Bloomberg.

“We have the expensive preferreds on the balance sheet that will be expensive to retire prematurely,” Liveris said. “Having said that, they’re very accretive, the immediate time” they’re retired, he said.


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