NEW YORK — Goldman Sachs Group, seeking to improve not only its balance sheet but its standing with investors, has undertaken a huge capital-raising program that includes an investment of at least $5 billion from Warren Buffett and a common-stock offering for another $5 billion.
A week earlier, Goldman looked to be on precarious ground as its stock price plunged amid fears it could not survive as an independent investment bank. But the company contended Wednesday that the crisis in the financial markets, which sent Lehman Brothers Holdings Inc. into bankruptcy court and Merrill Lynch into a sale to Bank of America, wasn’t the catalyst for the deals.
“Although we felt we were under no pressure to raise capital, we’ve always said if an opportunity arose, we would look at it,” Goldman spokesman Lucas van Praag said. Raising capital “gives us greater firepower and greater flexibility,” he said.
Goldman priced 40.65 million common shares at $123 apiece. An additional 6.1 million shares may be sold to cover overallotments, potentially boosting proceeds by $750.3 million.
Buffett, considered among the top investors in the world, will buy through his Berkshire Hathaway Inc. $5 billion in preferred Goldman stock and receive an option to purchase an additional $5 billion in common stock.
Buffett said during an interview on CNBC that “there’s no better firm on Wall Street.”
