Warren Buffett’s Berkshire Hathaway Inc. is making another bet on the newspaper industry, with a deal to buy the majority of Media General Inc.’s papers for $142-million in cash.
Berkshire will also loan $400-million to the company and provide a $45-million credit line. Media General will issue warrants for approximately 4.6 million Class A shares, representing 19.9 per cent of its existing shares outstanding.
Media General’s shares soared 38 per cent to $4.33 in mid-morning trade, touching their highest level in six weeks. The company had said in February it was exploring the sale of the papers.
The 63 daily and weekly newspapers scattered throughout the U.S. Southeast, including the Richmond Times-Dispatch, will be operated under BH Media Group, a new subsidiary of Berkshire Hathaway.