Media General sells 63 newspapers to Buffett in $142mn deal
Media General has signed agreements with BH Media Group, a subsidiary of Warren Buffett's Berkshire Hathaway, for sale of all its 63 newspapers with the exception of the Tampa group, in a $142 million cash deal, the Richmond based media house said Thursday.
Media General disclosed that it is in discussions with other prospective buyers for its Tampa print assets.
Berkshire Hathaway already owns the Buffalo News of New York and bought its hometown paper, the Omaha World-Herald, in December. The company is also the largest shareholder of Washington Post Co., with a 23 per cent stake.
Defending his decision to acquire more newspapers, Buffett said they will have a decent future if they continue delivering information that can't be found elsewhere. They also need to stop offering news free online, he has said.
"In towns and cities where there is a strong sense of community, there is no more important institution than the local paper," Buffett said in a statement Thursday. "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."
The statement was a reversal of his opinion in 2009, when he told Berkshire shareholders that with most newspapers facing prospect of unending losses because the industry had lost its essential nature, "we would not buy them at any price."
The newspapers being purchased by BH Media Group include 63 daily and weekly titles in Virginia, North Carolina, South Carolina and Alabama, in addition to digital assets, including websites and mobile and tablet applications. The newspapers also have a substantial commercial printing business.
"These newspapers are great institutions and powerful brands in their respective markets," said Terry Kroeger, president of BH Media Group.
"We are honored to have the opportunity to work with our new colleagues as we continue to produce top-notch news and advertising products in both print and digital platforms."
The Media General newspapers will be part of BH Media Group, along with the Omaha World-Herald Company newspapers. A sister company of the Omaha World-Herald Company, World Media Enterprises, Inc., will manage the Media General newspapers.
Under a separate credit agreement, Berkshire Hathaway has agreed to provide Media General with a $400 million term loan and a $45 million revolving credit line. In return, Media General will give Berkshire Hathaway with 19.9 per cent stake and a seat on the board of directors.
The new loan will be used by Media General to fully repay the company's existing bank debt due in March 2013.
Formed in 1969, Media General expanded into radio, broadcast and cable TV, and printing and newsprint.
With the sale of its portfolio of newspapers and weeklies, the company said it intends to focus on its 18 TV stations located mainly in the southeast and its digital operations.
Source: United States News.Net
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