Warren Buffett to acquire Media General newspapers for $142 million
17 May 2012
Warren Buffett's Berkshire Hathaway Inc has agreed to buy a majority stake in Media General Inc's papers in a deal worth $142 million in cash.
In addition, Berkshire will lend $400 million to Media General and provide a $45 million credit line against warrants for approximately 4.6 million Class A shares, representing 19.9 per cent of its existing shares outstanding.
Richmond, Vancouver-based Media General Inc today announced the signing of agreements with Berkshire Hathaway Inc for the stake sale and new financing.
A subsidiary of Berkshire Hathaway, BH Media Group, will purchase all of the newspapers owned by Media General, with the exception of the Tampa group, for $142 million in cash. Media General said it is in discussions with other prospective buyers for its Tampa print assets.
Media General said the $400 million term loan and the $45 million revolving credit line to fully repay the company's existing bank debt due March 2013 and will mature in May 2020.
In addition to the warrants for approximately 4.6 million Class A shares, which represents 19.9 per cent of Media General's existing shares outstanding, Berkshire Hathaway will also be entitled to nominate a director to Media General's board of directors.