Correction to Berkshire's BofA Share Purchase Story

By Austen Hufford Features Dow Jones Newswires

Warren Buffett's Berkshire Hathaway Inc. said Friday that it would buy 700 million Bank of America Corp. shares via warrants at below-market prices as it moves closer to becoming its largest shareholder.

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The move was expected after the Charlotte, N.C., bank received permission from the Federal Reserve this week to boost its per-share dividend to 48 cents a year. Warren Buffett has said a dividend of this size would also prompt his company to swap its preferred shares into common stock.

Berkshire Hathaway is using $5 billion worth of preferred shares to buy 700 million common shares at $7.14, well below the current market price of $24.32 and a value of $17.02 billion.

Bank of America shares rose 0.9% in premarket trading to $24.54 as the deal provides a vote of confidence in Bank of America's stock from one of the world's best known investors.

Write to Austen Hufford at austen.hufford@wsj.com

Corrections & Amplifications

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This was corrected at 7:23 a.m. ET because the original incorrectly stated Berkshire would buy 7 million BofA shares in the first paragraph.

Berkshire Hathaway said Friday that it would buy 700 million Bank of America shares via warrants. "Berkshire Hathaway to Exercise Warrants for 700 Million Bank of America Shares," at 7:12 a.m. ET, incorrectly stated Berkshire would buy 7 million BofA shares in the first paragraph. (June 30, 2017)

(END) Dow Jones Newswires

June 30, 2017 07:36 ET (11:36 GMT)