Buffett Buys 63 U.S. Local Newspapers by 111 Million
The investor group of billionaire Warren Buffett, Berkshire Hathaway, has bought most of the local newspapers Media General group for 111 million euros in cash, which significantly increases its holdings in print written in America.
“In towns and cities where there is a strong sense of belonging to the community there is no institution more important than the local newspaper”, said Buffett, who last November was done with The World Herald, a newspaper in his hometown, Omaha (Nebraska).
The third richest man in the world according to Forbes magazine acquires a total of 63 printed newspapers, both daily and weekly, spread across southeastern states of the United States and Virginia, Alabama or Carolina, and their respective websites and mobile applications .
The purchase, which includes headers as the Richmond Times-Dispatch, Berkshire Hathaway is supposed to do with all printed publications Media General with the exception of its division of Tampa, Florida, who sold the media group of independently.
In addition, under the terms of the agreement, the investment group of the “Oracle of Omaha” Media General will give a credit of $ 445 million (350 million) in return for guarantees by 4.6 million shares of that group, which is that Berkshire Hathaway will have a 19.9% stake in the company.
“The many citizens of the towns they read the newspapers that we are acquiring fit perfectly into our model and we are delighted that they have found a permanent home in Berkshire Hathaway,” Buffett said in a statement.
Billionaire thus increases very significantly its properties in the U.S. press, which already has the Buffalo News newspaper in upstate New York and a majority stake in The Washington Post, which said last November the group Omaha World-Herald.
On several occasions the U.S. billionaire has emphasized the importance of local media, and in an interview on CNBC last February from the headquarters of World Herald newspaper spoke about his interest in this sector, but also on the problems it faces.
“They’ve been giving away their product through internet while they sold, and that’s not a great business model,” he said then.
Media General’s shares shot up 38.54% by the middle of the session on Wall Street, while shares of Berkshire Hathaway Class A stock was down 0.33%.
Category: Business News
