Warren Buffett's Berkshire Hathaway plans to buy the remaining shares of Wesco Financial Corp. that it doesn't already own, according to an SEC filing this afternoon.
Berkshire currently owns 80.1 percent of Wesco. It has proposed to buy the remaining 19.9 percent at book value.
Wesco has about 1.43 million shares outstanding that Berkshire doesn't own. Wesco's stock was up about 11 percent today on the news and was trading at about $361 a share near the end of the day.
Assuming investors have correctly estimated that Wesco's book value is about $361 a share, Berkshire would end up paying roughly $515 million for the remaining shares--a relative drop in the bucket for Buffett's firm.
The transaction would be paid for in cash and Berkshire B stock. That's the second time this year Berkshire has taken advantage of its lower-price B shares as part of a merger deal (the other being the much-larger Burlington Northern Santa Fe Corp. deal).
The deal must be approved by Wesco and Berkshire's boards, but it would be highly surprising if it weren't given the green-light. Buffett's longtime friend and business partner Charlie Munger is chairman of Wesco's board, and their close friend Bill Gates owns about 1.3 percent of Wesco's outstanding shares.
Finally, here's a prediction -- Berkshire will someday do the same thing with the 10.5 percent of MidAmerican Energy Holdings that it does not presently own.