Berkshire Hathaway Bids on ResCap’s Assets

The company wants to be the initial bidder for mortgage unit, loans

   

Berkshire Hathaway Bids on ResCap’s Assets

The bidding for bankrupt Residential Capital’s (ResCap) business units has become more competitive.

Billionaire Warren Buffett’s Berkshire Hathaway (NYSE:BRK.A, BRK.B) has made a bid to become the initial bidder for ResCap’s mortgage unit and a part of its loan portfolio, Bloomberg noted.

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Fortress Investment Group (NYSE:FIG) had planned to purchase the mortgage unit for $2.4 billion.

Berkshire Hathaway has offered to pay the same amount, but said it would cut its breakup fee to $24 million. Fortress is asking for a $72 million breakup fee.

Offering $1.45 billion for the loan portfolio, Berkshire Hathaway topped Ally Financial’s initial offer of $1.4 billion.

The investment company filed its offers with the U.S. Bankruptcy Court. The offers remain open until June 19.

ResCap, owned by Ally Financial, itself 74% owned by the federal government after a bailout during the economic crisis, filed for bankruptcy in May.

Berkshire had tried to purchase ResCap from Ally prior to the bankruptcy filing, hoping to protect $900 million in unsecured debt in the company, sources told Bloomberg.


Article printed from InvestorPlace Media, http://investorplace.com/2012/06/berkshire-hathaway-bids-on-rescaps-assets/.

©2014 InvestorPlace Media, LLC

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