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VOL. 132 | NO. 131 | Monday, July 3, 2017

Warren Buffett to Buy 700 Million Shares in Bank of America

By KEN SWEET, AP Business Writer

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NEW YORK (AP) – Warren Buffett's Berkshire Hathaway said Friday it will amass a 700-million-share stake in Bank of America, making Buffett the largest shareholder in two of the nation's largest banks.

Berkshire said that it will convert warrants it purchased in Bank of America back in 2011, when the bank was struggling following the financial crisis, into common shares in the bank. The stake in the bank will make Berkshire the largest shareholder in Bank of America, exceeding mutual fund giant Vanguard.

Buffett said in his annual shareholder letter that he would convert his warrants in Bank of America to common stock if the bank were ever to raise its annual dividend above 44 cents a share, which the bank did this week. This week, the bank announced it would raise its annual dividend to 48 cents a share starting in the third quarter.

After the bank raises the dividend, Buffett will convert his warrants at a price of $7.14 a share, which is significantly below the stock's current price of about $24 a share. If Buffett were to sell his acquired stake in the bank, Berkshire would walk away with a profit of $12 billion.

Buffett is also the largest shareholder in Wells Fargo, a stake that has drawn some controversy following Wells Fargo's sales practices scandal.

Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 79 321 2,586
MORTGAGES 90 426 3,033
FORECLOSURE NOTICES 0 37 527
BUILDING PERMITS 153 796 6,864
BANKRUPTCIES 37 213 2,000
BUSINESS LICENSES 22 152 1,311
UTILITY CONNECTIONS 23 100 730
MARRIAGE LICENSES 15 58 432