Goldman Sachs and Berkshire Hathaway Amend Warrant Deal (GS, BRK-A)
Goldman Sachs Group, Inc. (GS) and Warren Buffet’s Berkshire Hathaway (BRK-A) came to an agreement on Tuesday to amend its financial crisis-era warrant deal that will allow Goldman to pay Berkshire with stock, rather than cash.
According to the previous deal, which was made during the financial crisis, Berkshire had the right to purchase more than 43.5 million shares of Goldman Sachs at an exercise price of $115 per share before October 1, 2013.
However, the deal stated that Goldman would have had to pay Berkshire in cash for the difference between its current stock price, 27% above the exercise price, and the exercise price.
The amended deal will allow Goldman to settle the difference with stock. This cements Berkshire’s place as a long-term investor in Goldman Sachs.
Goldman Sachs shares were up $1.39, or +0.94%, during Tuesday morning trading. The stock is up +14.23% over the past year.
The Bottom Line
Shares of Goldman Sachs (GS) have a dividend yield of 1.36% based on Tuesday’s intraday trading price of $147.50 and the company’s annualized dividend payout of $2.00 per share.
Goldman Sachs Group, Inc. (GS) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
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