Buffett's Berkshire Hathaway buys Winston-Salem Journal, Media General papers
red bottom shoesA deep belief in newspapers' role in the fabric of their communities persuaded billionaire investor Warren Buffett to spend $142 million to buy the Winston-Salem Journal and 62 other Media General Inc. properties.The second corporate owner of the Journal in its 115-year history pledged Thursday to make the newspaper "a permanent" part of the Berkshire Hathaway circle."In towns and cities where there is a strong sense of community, there is no more important institution than the local paper," said Buffett, Berkshire's chairman, in a statement."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 deal by Berkshire subsidiary BH Media Group is expected to close by June 25. It is subject to customary closing conditions, including Federal Trade Commission approval under the Hart-Scott-Rodino antitrust act. The Tampa Tribune was not included in the deal, with Media General saying it still is pursuing buyers for that newspaper.Investors reacted to the sale by sending Media General's share price up 33 percent to close at $4.18 a share.Media General purchased the Winston-Salem newspapers from the Gray family in 1969.In addition to acquiring the Journal, BH Media Group is taking newspaper properties that include the Richmond Times-Dispatch and newspapers in Hickory, Statesville, Mooresville, Morganton and Reidsville.Jeffrey Green, publisher of the Journal, said the purchase "is one of the best possible outcomes we could have asked for. We are very excited to become part of this highly respected organization.
red bottoms"The people at Berkshire Hathaway believe in the future of newspapers, and they have a strong commitment to local news leadership and community content. They are very advanced in the digital world, and they believe in being paid for content. They have the resources and know-how to ensure our future success."As part of the deal, Berkshire will become Media General's sole financial lender through a $400 million term loan and a $45 million credit line. That essentially pays off Media General's existing debt to bank lenders, including Bank of America Corp.Ray Kozakewicz, corporate communications manager of Media General, said the sale of the newspaper division and the financing terms "both go together as equally important."Berkshire will own 19.9 percent of Media General's outstanding shares as part of the deal, giving it a significant say in how Media General operates as a broadcast-only business."We're very happy that our newspapers will become part of Berkshire Hathaway's BH Media Group, a company with a strong commitment to local news leadership and community engagement," said Marshall N. Morton, president and chief executive of Media General."Our new credit agreement addresses Media General's long-term capital needs and provides the company with significant financial and operating flexibility."Gayle Anderson, president and chief executive of the Winston-Salem Chamber of Commerce, said the sale "is a welcome development because Winston-Salem needs a strong, financially secure local newspaper."With these resources, I hope the Journal will be able to increase its coverage of local business and government news so that our citizens can be fully informed about all the issues and opportunities our community faces."
cheap red bottom shoesAlthough Berkshire owns newspapers in Omaha, Neb., and Buffalo, N.Y., and is the largest stakeholder of The Washington Post Co., its acquisition of Media General's newspapers brings a deeper industry connection.In December, Berkshire agreed to buy Omaha World-Herald Co., publisher of the Omaha World-Herald and six other daily papers in Nebraska and Iowa in a deal worth about $200 million.The transition from Media General will take place over several months. A sister company of the Omaha World-Herald Co. — World Media Enterprises Inc. — will manage the Media General newspapers.Financial and media analysts called the deal "a huge surprise" given it took less than a month to go from discussion to done deal, and Media General got close to full value for the newspaper properties.Media General announced Feb. 22 it was putting its newspaper division up for sale in an attempt to relieve some of the squeeze from its debt, which was at $658 million on Dec. 31. Analysts said Media General would need to gain $120 million to $150 million from the sale for it to make sense financially."This is about the best deal possible for a struggling media company who had declared its need to sell the newspaper division to survive," said Amit Chokshi, founder and owner of Kinnaras Capital Management LLC.Chokshi has been a vocal critic of how Media General's management team was handling the company's financial situation. He wrote open letters urging them to sell the newspaper division.Chokshi and other analysts had questioned whether Morton was being realistic when he said in April that "our newspapers are the leading print products in their core markets, and we believe they will be attractive to many prospective buyers."Chokshi said one advantage the newspapers will have under BH Media Group is little worry about meeting analysts' quarterly earnings forecasts.
|
Vacío
|
