Media General, a Berkshire Hathaway subsidiary, acquired the majority of Media General’s 62 papers for $142 million in cash in May and lent the company $400 million to pay off debt, as well as extended it a $45 million credit line. As part of the deal, he acquired the 4.6 million warrants which at the time equaled 19.9% of its shares outstanding. Berkshire also received the right to nominate a director to Media General’s board of directors.
The stock jumped 33% on announcement of the deal, and has gained 57% since then.
“In towns and cities where there is a strong sense of community, there is no more important institution than the local paper,” said Buffett. “The many locales served by the newspapers we are acquiring fall firmly in this mold and we are delighted they have found a permanent home with Berkshire Hathaway.”
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