Buffett Sees Redemption of Wrigley Preferred Stake That Pays 5%

  • Portion of investment can be redeemed starting in October
  • Berkshire got stake as part of Mars-Wrigley deal in 2008

Berkshire Hathaway Inc. said it expects a portion of the $2.1 billion preferred stake that Chairman Warren Buffett took in Wm. Wrigley Jr. Co. to be bought back as soon as this year.

Half of the investment in the chewing gum maker can be redeemed over a 90-day period starting Oct. 6, Omaha, Nebraska-based Berkshire said Friday in a regulatory filing. The securities pay a 5 percent annual dividend.

“We currently anticipate that such shares will be redeemed,” Berkshire said in the filing. The document repeats language from prior quarterly reports that the rest of the investment could be terminated in 2021.

Berkshire has long been a provider of financing to companies looking for quick access to large sums of capital, and Buffett often commands above-market rates on the deals. Goldman Sachs Group Inc. and General Electric Co. are among companies that have repaid Berkshire in recent years as cheaper funds in recent years, lowering their cost of capital.

Buffett helped Mars Inc. buy Wrigley in 2008 and got the preferred securities along with $4.4 billion in bonds paying 11.45 percent a year. The maker of M&M’s candies retired that debt in 2013.

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