Seattle/New York — Warren Buffett’s bet on Bank of America is about to pay off with a roughly $12bn windfall. The billionaire plans to exercise warrants obtained six years ago in a vote of confidence in Bank of America while its shares were tumbling amid multi-billion-dollar probes tied to the housing meltdown. The cash infusion helped the bank put to rest doubts about whether it had enough capital, and its shares have more than tripled since then. In the 2011 deal, Buffett’s Berkshire Hathaway invested $5bn in Bank of America in exchange for preferred stock and the right to buy 700-million common shares, a stake now worth $17bn. Berkshire said in a statement on Friday that it would convert its preferred shares into common stock once the North Carolina-based bank increases its dividend, now planned for the beginning of the third quarter. Buffett laid out his thinking for the conversion, which will make him the company’s biggest shareholder, in a February letter to investors, saying ...
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