Warren Buffett's Berkshire Hathaway Inc. will buy the 19.9 percent it does not own of Wesco Financial Corp., in a deal worth about $547.6 million, the companies said Monday.
In September, Buffett submitted a takeover bid for Wesco, run by Berkshire Vice Chairman Charlie Munger. Berkshire acquired its 80.1 percent stake in Wesco more than 30 years ago.
Wesco shares closed at $380.67 on Friday. The cash-and-stock deal will give each Wesco shareholder the Jan. 31 Wesco book value of $386.55 per share in either cash or Berkshire Class B common stock, plus considerations for monthly earnings and plus or minus the change in net unrealized appreciation of Wesco's investment securities.
The deal is expected to close before the end of the second quarter of 2011. It requires the approval of a majority of the outstanding Wesco shares not owned by Berkshire Hathaway.
Wesco is based in Pasadena, California, and its main businesses are insurance, furniture rental and steel. Munger, 87, has been Wesco's chief executive since 1984, and Berkshire's vice chairman since 1978.
Buffett, 80, has run Berkshire since 1965. The Omaha, Nebraska-based company has a market value of about $200 billion, operates about 80 businesses, and owns tens of billions of dollars of stock.
Wesco set up a committee of three independent directors to review Berkshire's proposal in September. It said on Monday that the committee determined that the merger agreement is "fair to and in the best interests of Wesco and its shareholders other than Berkshire Hathaway and its affiliates."
Greenhill & Co. is acting as financial adviser to Wesco's special committee.
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