Warren Buffett offers to buy rest of Wesco Financial

Warren Buffett’s Berkshire Hathaway Inc. announced plans to buy the 19.9% it does not own of Wesco Financial Corp., a company run by Berkshire Vice Chairman Charlie Munger, in a transaction valued at about $514 million.

Wesco shares closed 11.8% higher, rising $38.25 to $363, after Berkshire revealed the proposal in a Securities and Exchange Commission filing Thursday.

Based in Pasadena, Wesco has three main businesses: insurance, through its Wesco-Financial Insurance Co. and Kansas Bankers Surety Co. units; furniture rental, through its Cort Business Services Corp unit; and steel, through its Precision Steel Warehouse Inc. unit.

Berkshire acquired its 80.1% stake in Wesco more than 30 years ago. Munger, 86, has been Wesco’s chairman and chief executive since 1984, and Berkshire’s vice chairman since 1978. Buffett turns 80 on Monday.

Wesco and Berkshire did not immediately return calls for comment. Berkshire ended June with $27.95 billion of cash.

In Thursday’s filing, Omaha-based Berkshire said it decided Wednesday to propose a takeover, in which it would swap Class B shares or cash valued at Wesco’s book value per share in exchange for Wesco stock.

Microsoft Corp. co-founder Bill Gates, a Berkshire director, owns 1.26% of Wesco shares, Thursday’s filing said.

The Wesco transaction requires several approvals, including by the companies’ boards and by a majority of Wesco shares not owned by Berkshire.

Berkshire Class A shares closed Thursday down $673 at $114,433, and its Class B shares fell 43 cents to $76.37.