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Tuesday’s rally has reduced the spreads on some big pending mergers to levels not seen since early last month. A 4% rise in shares of Merrill Lynch (MER) means that the brokerage firm is trading just 5% below the price shareholders can expect to get when acquirer Bank of America (BAC) completes the $50 billion deal. That’s the narrowest spread since Oct. 8, the day before Merrill shares lost a quarter of their value in a 679-point rout of the Dow Jones Industrial Average. For most of the six weeks since BofA agreed to buy Merrill for 0.8595 BofA share, the spread between the value of the of

Another setback for Constellation Energy (CEG). The Baltimore-based energy merchant and utility operator saw its shares drop 3% Monday after the latest twists in Constellation’s attempt to extricate itself from a credit squeeze via a sale to Warren Buffett’s Berkshire Hathaway (BRKA).

Berkshire agreed in September to buy Constellation for $4.7 billion, which was just a fraction of the energy company’s price this past summer, before the credit squeeze left the Constellation struggling to raise money for its capital-intensive trading business. As part of the deal, which is expected to close in

The Warren Buffett halo effect isn’t quite as great at General Electric (GE) as it was at Goldman Sachs (GS). GE shares dropped in early trading Thursday, after the Fairfield, Conn., conglomerate sold $12 billion worth of common stock to the public at $22.25 a share.

That’s a 9% discount to the stock’s closing price Wednesday. Thursday’s selloff comes after GE announced that Buffett, CEO of Berkshire Hathaway (BRKA), would plow $3 billion into the company by buying preferred stock paying a 10% dividend. In contrast, shares of Goldman rose 6% last Thursday after the company said Buffett would

Warren Buffett can’t pass up a blue-chip bargain. The billionaire investor and CEO of Berkshire Hathaway (BRKA) has come to the rescue of another embattled U.S. firm, with Wednesday’s announcement that Berkshire will buy $3 billion worth of preferred stock in General Electric (GE).

The deal’s terms are practically identical to the ones Buffett got last week in making a $5 billion investment in Goldman Sachs (GS). Buffett will buy preferred shares paying a rich 10% dividend and redeemable by the issuer at a 10% premium. Berkshire also gets warrants to buy an equal amount of common stock at a

Warren Buffett is back on the warpath. The billionaire investor and CEO of Berkshire Hathaway (BRKA) said Tuesday evening he’ll put $5 billion into Goldman Sachs (GS) via a purchase of preferred stock paying a cool 10% dividend. Buffett also gets five-year warrants to buy $5 billion in Goldman common shares at $115 a pop - an 8% discount to Tuesday’s closing price of Goldman shares.

The preferred stock sale, together with a plan by Goldman to raise $2.5 billion in a public offering of common shares, will give the big bank a wad of fresh funds at a time when cash has been tight in the market.