Goldman Sachs to Redeem Preferred Stock Issued to Berkshire Hathaway

[dcollon]

         

   

Goldman Sachs to Redeem Preferred Stock Issued to Berkshire Hathaway

Friday, March 18, 2011 01:16:00 PM

 

 

The Goldman Sachs Group, Inc. (NYSE: GS) today announced that the Federal Reserve has concluded that it has no objection to Goldman Sachs’ proposed 2011 capital actions, which include the redemption in full of the 50,000 shares of the Company’s 10% Cumulative Perpetual Preferred Stock, Series G (Preferred Shares) held by Berkshire Hathaway Inc. and certain of its subsidiaries (collectively, Berkshire Hathaway), the repurchase of outstanding common stock and a potential increase in our quarterly common stock dividend.

 

The Company has mailed notices of redemption to Berkshire Hathaway stating that the Company will redeem in full the Preferred Shares held by Berkshire Hathaway, for the stated redemption price of $110,000 per share, plus accrued and unpaid dividends. The redemption date will be April 18, 2011. Berkshire Hathaway continues to hold the warrant to purchase 43,478,260 shares of the Company’s common stock, par value $0.01 per share, which Berkshire Hathaway purchased from the Company concurrently with the Preferred Shares on October 1, 2008.

 

The redemption includes a one-time preferred dividend of approximately $1.64 billion which will be reflected in the Company’s first quarter results. This is expected to reduce reported diluted earnings per common share for the first quarter by approximately $2.80 per share. The redemption also results in the acceleration of $24 million of preferred dividends that are payable from April 1 to the redemption date, which will reduce reported diluted earnings per common share for the first quarter by approximately $0.04. While the Preferred Shares were outstanding, the Company incurred a dividend expense of $125 million per quarter, or $500 million annually, which reduced diluted earnings per common share by $0.85 in 2010.

 

 

[Parsad]

That was one hell of an investment!  Cheers!

[Liberty]

Indeed! This post by Geoff Gannon explains just how good it was:

 

http://www.gurufocus.com/news.php?id=120419

[ericd1]

And there are those that believe Buffett has lost his touch...Are you kidding!!!

 

With billions to invest Buffett's high quality deal was great...But for some board members with smaller amounts to invest the returns in preferreds were even better... :)

 

 

 

 

[Liberty]

Videos of Warren in South Korea, talks about the GS preferred at the end of the first vid.

 

http://www.gurufocus.com/news.php?id=126647

 

Update: This is the extended version of the Goldman discussion:

 

http://www.cnbc.com/id/15840232/?video=3000011835&play=1