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Text size [+][-]  Saturday March 20 2010GLOBAL EDITION

Feature
24 Sep 2008 20:00

Sage stuffing

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Goldman Sachs Group said on September 23 that Berkshire Hathaway would buy $5bn of perpetual preferred stock in a private offering. The preferreds carry a dividend of 10% and are callable at any time at a 10% premium.

Berkshire Hathaway, headed by Warren Buffett, will also receive warrants to purchase $5bn of common stock at a strike price of $115 per share, exercisable at any time for five years.

In addition, Goldman said it is raising $5bn in common equity in a public offering.

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The Sage of Omaha’s $5bn investment in Goldman has given the financial sector a psychological boost. But the newly-minted commercial bank is paying up. Goldman’s fellows, mostly lacking its management credibility and relatively clean balance sheet, would have to pay much more.

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More stories by:  Antony Currie






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