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Berkshire to convert stake in BofA from preferred to common

Published 06/30/2017, 07:37 AM
© Reuters.  Berkshire to convert stake in BofA from preferred to common
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  • As promised by Warren Buffett some months ago, Berkshire Hathaway (NYSE:BRKa) (BRK.A, BRK.B) will exercise its warrants to buy 700M shares of Bank of America's (NYSE:BAC) common stock once the just-announced dividend increase takes place.
  • The exercise price will be $7.14 per share vs. BoA's current price of $24.56 (up 1% premarket), and the move will make Berkshire (at 7%) the single largest holder of Bank of America.
  • Consideration will be the $5B of Bank of America preferred shares currently held by Berkshire.
  • Bank of America this week was approved for a hike in the annual dividend to $0.48 per share vs. the current $0.30. Buffett had said he would convert if the dividend rose above $0.44.
  • Now read: Bank Of America Vs. JP Morgan Vs. Citigroup (NYSE:C): Post CCAR, Where's The Juice?


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