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BofA Urges Approval of New Buffett Deal to Avoid Share Dilution

Bank of America Corp. urged investors to approve new terms on Berkshire Hathaway Inc. (BRK/A)’s preferred stock stake, saying a rejection could push the lender to issue new securities that would dilute profits.

The deal with Warren Buffett’s Berkshire would increase Tier 1 capital by $2.9 billion, the Charlotte, North Carolina-based bank said today in a regulatory filing. Tier 1 capital is a measurement used by regulators to assess a lender’s ability to absorb losses.

A rejection is “one factor we would consider in evaluating whether to issue additional series of preferred stock, which may be dilutive to earnings per share of our common stock,” according to the filing from Bank of America, the second-largest U.S. lender by assets.

To contact the reporter on this story: Noah Buhayar in New York at nbuhayar@bloomberg.net

To contact the editor responsible for this story: Rick Green at rgreen18@bloomberg.net

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