NBC - BUFFET RESCUES GENERAL ELECTRIC

BUFFET RESCUES GENERAL ELECTRIC

In an effort to shore up the underpinnings of General Electric, the parent of NBC Universal, Wall Street investor Warren Buffett on Wednesday pledged to buy GE preferred stock for $3 billion. The company has been trading near its five-year low, largely because of turmoil in its GE Capital unit, which, until recently, had been accounting for nearly half the company's annual profit. Under the deal, Buffett's Berkshire Hathaway company will receive an annual 10-percent dividend worth $300 million a year and also receive warrants to buy $3 billion in common stock within five years at $22.25 a share. (It closed Wednesday at $24.50.) In its report about the deal, today's (Thursday) Los Angeles Times observed that it shows "that the Oracle of Omaha drives a hard bargain." In an interview on CNBC (which GE also owns), Buffett expressed confidence that GE will "be around in five or 10 or 100 years from now." He also forecast that "we'll get action" on the Congressional bail-out plan. "If we don't," he said, "i'll have done some dumb things."

02/10/2008