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Around lunchtime on Wall Street, USG is up almost 22 percent to $6.89 a share. Current price: [USG
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As he did with General Electric and Goldman Sachs, Buffett negotiated an impressive return for his money.
ALSO ON WBW -- WARREN BUFFETT ON MARKET MELTDOWN:
IT'S HAPPENED BEFORE AND IT'S BEEN EVEN WORSE
Berkshire will get "contingent convertible senior notes" with an initial interest rate of 10 percent a year.
If USG shareholders approve, the notes will be convertible into USG common stock at the price of $11.40 a share. While that's double yesterday's closing price, USG shares were trading between $30 and $40 earlier this year.
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If shareholders don't give their OK, the interest rate on the notes jumps to 20 percent a year.
Berkshire is already USG's biggest shareholder with 17.1 million shares worth about $118 million at the moment.
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In its news release announcing the deal, USG says Berkshire will vote those shares in favor of the proposed conversion at a special shareholders meeting to be held in the first quarter of next year.
Canada's Fairfax Financial Holdings is buying another $100 million in notes on the same terms.
USG CEO William Foote is quoted in the release as saying, "We are gratified by the expression of confidence in USG Corporation by two premier financial institutions. We consider these substantial investments by Berkshire Hathaway and Fairfax as validation of our business strategy and the company's long-term prospects. This transaction provides USG with long-term capital that significantly improves our financial flexibility as we manage through the steep recession in our primary markets."
Current Berkshire stock prices:
Class A: [US;BRK.A
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Class B: [US;BRK.B
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General Electric: [GE
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Goldman Sachs: [GS
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Questions? Comments? Email me at
- Warren Buffett on Market Meltdown: It's Happened Before And It's Been Even Worse (November 21)
- Berkshire Hathaway Down Almost 50% From All-Time High As Stock Sinks Again (November 21)
- Berkshire Hathaway Plunges 12% For Worst Day Since 1987's Black Monday (November 19)
- A Goldman Opportunity: How Average Investors Can "Out-Buffett" Warren Buffett (November 19)
- Buffett's Berkshire Gets A Billion In Beer Bucks (November 18)
- Berkshire Hathaway Shares Close Below $100,000 For First Time In Two Years (November 17)
- Warren Buffett Would Provide Backstop For "Misunderstood" American Express - Barron's (November 16)
- Warren Buffett's Berkshire Hathaway Sharply Boosts ConocoPhillips Stake (November 14)
Data is a real-time snapshot *Data is delayed at least 15 minutes