Shares in building materials firm USG Corporation (NYSE:USG) shot up in pre-market trading after receiving a bid approach from privately-held German rival Gebr. Knauf.
Knauf submitted an indicative and non-binding proposal to acquire all of USG’s share capital at US$42 a share, prompting a rise in USG’s shares to US$40.31 in screen-based trading from Friday’s close of US$33.51.
Berkshire Hathaway's stake in USG worth around US$1.8bn
The terms value ISG at US$5.9bn.
Knauf’s announcement followed an admission by Berkshire Hathaway Inc (NYSE:BRK.B), the investment vehicle of legendary investor, Warren Buffett, that it had been approached by Knauf to see whether it was interested in selling its 30.8% stake in USG.
According to a stock market filing by Berkshire Hathaway, the Buffett vehicle has offered to sell Knauf a six-month option at US$2 a pop to buy its stake in USG.
Based on Knauf’s putative offer, Berkshire Hathaway’s stake in USG is worth around US$1.8bn.
Shares in Berkshire added 3.55% in New York.