Warren Buffett will become one of Goldman Sachs ten largest shareholders essentially for free,after he and the bank amended a 2008 deal to exchange his potential profit on Goldman warrants for stock.
The exchange saves Buffett billions of dollars in upfront costs and lets Goldman minimize dilution to its stock. Under a 2008 deal,Buffett had held the right to acquire about 43.5 million shares of stock at an exercise price of $115.
Goldman said it will now give Berkshire shares reflecting the difference between the warrants original exercise price of $115 and the average closing price of Goldmans stock for the 10 trading days up to October 1.
Goldman shares rose 0.9 percent to $147.43 in early trading. At that price,the structure of the deal implies that Berkshire would receive 9.6 million Goldman shares.