Berkshire’s $3 Billion Dow Chemical Convertible Preferred May Be Redeemed
Andrew Liveris, the CEO of Dow Chemical, said yesterday that he planned to repay Berkshire Hathaway the $3 billion Dow received in 2009 to help fund its acquisition of Rohm & Haas. Berkshire’s investment in Dow is in a 8.5% convertible preferred stock that has resulted in Berkshire receiving $255 million in dividends annually. The preferred stock is convertible into 72.6 million shares of Dow at a conversion price of $41.32. Dow’s shares closed yesterday at $29.18.
When these preferred shares are redeemed, Berkshire will have an additional $3 billion to invest. I am quoted in a Bloomberg article on this topic:
“Dow’s funds would give Buffett “a little more ammunition in trying to acquire a whole company” or make new or larger equity bets, said David Kass, a professor at the University of Maryland’s Robert H. Smith School of Business, in an interview before today’s conference call.”
The link to the entire article is:
