GE to Buy Back Berkshire Stake

The $3 billion preferred stake is callable in October.
By Dan Freed ,

NEW YORK (

TheStreet

) --

General Electric

(GE) - Get Report

plans to buy back a preferred equity investment

Warren Buffett's

Berkshire Hathaway

(BRK.B) - Get Report

made in the company during the depths of the financial crisis, according to a spokeswoman, citing comments by GE Chairman and CEO Jeff Immelt at the annual investor meeting Tuesday.

Buffett's $3 billion investment in Oct. 2008 pays a hefty 10% annual dividend. Buffett also received warrants to buy $3 billion in GE shares with a strike price of $22.25, according to

Bloomberg

.

Immelt said he would retire the stake no later than Oct. 2011, when it can be called for a 10% premium.

Buffett reached a similar deal in Sept. 2008 to take a $5 billion preferred stake in

Goldman Sachs

(GS) - Get Report

in Sept. 2008. Goldman is also interested in buying out Buffett's stake, according to earlier reports.

GE recently raised its

dividend

by 17% to 14 cents per share from 12 cents per share.

--

Written by Dan Freed in New York

.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Loading ...