* Berkshire in formal offer to buy 19.9 pct it doesn't own
* Wesco run by Berkshire Vice Chairman Charlie Munger
* Wesco sets up committee to review proposal (Adds Wesco forming committee to review proposal, details on Berkshire)
NEW YORK, Sept 1 (Reuters) - Warren Buffett submitted a formal offer for his Berkshire Hathaway Inc (BRKa.N) (BRKb.N) to buy the 19.9 percent it does not own of Wesco Financial Corp WSC.A, run by Berkshire Vice Chairman Charlie Munger.
The cash-and-stock transaction would be worth about $500 million, based on Wesco's reported book value as of June 30. The actual value would be based on book value at the time of closing, which Buffett hopes will occur this year.
In a letter to Wesco dated Wednesday, the 80-year-old Buffett said the proposal would be tax-free to Wesco shareholders, and let them "participate not only in the future of Wesco, but also in the future of all of Berkshire."
The letter was revealed in a U.S. Securities and Exchange Commission filing.
In a statement, Wesco said it has set up a committee of three independent directors to review Berkshire's proposal. It said there is no guarantee a transaction will take place.
Buffett first publicly revealed his interest in buying Wesco on Aug. 26, causing shares of Wesco to rise 11.8 percent. The shares closed Wednesday up 46 cents at $363.00, giving the 19.9 percent stake a market value of about $514 million.
Wesco is based in Pasadena, California, and its main businesses are insurance, furniture rental and steel.
Berkshire acquired its 80.1 percent stake in Wesco more than 30 years ago. Munger, 86, has been Wesco's chief executive since 1984, and Berkshire's vice chairman since 1978.
The transaction requires approvals by the companies' boards and by a majority of Wesco shares not owned by Berkshire.
Buffett has run Berkshire since 1965. The Omaha, Nebraska-based company has a market value of about $200 billion, operates about 80 businesses, and owns tens of billions of dollars of stock. (Reporting by Jonathan Stempel in New York; Editing by Bernard Orr, Phil Berlowitz)