Bank of America Corp (BAC) & Warren Buffett: A Quick Rundown of the Deal

A template to open discussions could be Berkshire’s recent deal with Goldman Sachs regarding similar warrants. Instead of executing the full value of the warrants and walking away with a 9% stake in the investment bank, both parties renegotiated the deal, and Berkshire will instead receive shares corresponding to the gain since the warrants were written.

With a current paper gain of $3.5 billion with its Bank of America Corp (NYSE:BAC) warrants, a similar deal would net Berkshire almost 290 million sharesat today’s price, a much more manageable chunk than the original 700 million. While I don’t think Berkshire would necessarily renegotiate this deal with over eight years remaining, it might be in the best interest of B of A shareholders for Moynihan to at least approach Buffett and company with an offer. 

The article Remembering Buffett’s Sweetheart Bank of America Deal originally appeared on Fool.com and is written by Robert Eberhard.

Fool contributor Robert Eberhard owns shares of Berkshire Hathaway. The Motley Fool recommends Berkshire Hathaway, Goldman Sachs, and H.J. Heinz Company. The Motley Fool owns shares of Bank of America, Berkshire Hathaway, and General Electric.

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