1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Holly LaFon
Holly LaFon
Articles (7467) 

Berkshire Hathaway Exercises Warrants to Own 17 Pct of Media General

September 25, 2012 | About:

Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B), the conglomerate owned by Warren Buffett, has become owner of 17% of Media General Inc. (NYSE:MEG) through exercise of warrants ahead of their May 2020 expiration date. The 4,646,220 warrants cost one cent each, and Buffett traded them for shares priced at $4.92 on September 24, or a total value of about $23 million.

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.”

See Warren Buffett’s portfolio here.

Rating: 3.2/5 (9 votes)


Please leave your comment:

GuruFocus has detected 3 Warning Signs with Berkshire Hathaway Inc $BRK.A.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.

Performances of the stocks mentioned by Holly LaFon

User Generated Screeners

tlimScreen 1
itflpalmsYacktman ROR
kkopacz.bizLow PEG Upturn
jtepper2Cheap Energy
DBrizanmon mmm mmc mck lmt lly lltc
kennyorrgrowth rate screen
rsanford39RATINGS Extract
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)