Shareholders of Home Capital Group voted against Warren Buffett’s additional investment in the alternative mortgage lender, keeping the legendary investor’s stake at 19.99 per cent.
READ MORE: Warren Buffet’s company invests into troubled Home Capital Group
At a special meeting, more than 88 per cent of shareholders voted against of Buffett’s Berkshire Hathaway acquiring 23.9 million more shares for $246.7 million, at $10.30 per share. That would have been on top Buffett’s initial Home Capital investment of $153 million in June.
READ MORE: Why trouble at alternative lender Home Capital could reduce your mortgage options
Buffett’s backing and extension of a $2-billion credit facility to Home Capital helped restore investor confidence after the alternative mortgage lender faced a partial run on its deposits following regulators’ accusations that the company misled investors.
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The mortgage lender’s board unanimously recommended that shareholders approve the additional investment. However, Home Capital shareholders were mixed on Buffett’s second tranche of investment, with some arguing that the additional investment would be too dilutive and provide few additional benefits.
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