Billionaire investor Warren Buffett's Berkshire Hathaway, Inc. (BRKa: Quote, BRKB) revealed Monday in a regulatory filing that it has exercised warrants to acquire a 17 percent stake in Media General, Inc. (MEG: Quote).
The penny warrants for around 4.6 million Class A Media General shares were issued to Berkshire as part of of a separate deal when Media General sold 63 daily and weekly newspapers for $142 million to Berkshire's unit, BH Media Group.
The warrants then represented 19.9 percent of Media General's outstanding shares, and were issued in return for a $445 million funding to help Media General refinance its existing bank debt.
The funding included a $400 million term loan with an interest rate of 10.5 percent, and a $45 million revolving credit line. In addition, Berkshire also gained the option to nominate a director to Media General's Board of Directors.
Berkshire has already recommended Wyndham Robertson, a former editor of Fortune Magazine as a director. He has earlier served on Media General's board from 1996 to 2005.
In a Form 4 filing with the U.S. Securities and Exchange Commission, Berkshire revealed that it acquired 4.65 million shares of Media General's Class A common stock worth about $23.6 million, based on Media General's closing share price of $5.07 on Monday.
Media General completed the sale Of 63 daily and weekly newspapers, that was agreed upon in mid-May, to World Media Enterprises on June 25.
BH Media Group will include the Media General newspapers as well as the Omaha World-Herald Company newspapers. The Media General newspapers will be managed by World Media Enterprises, Inc., a sister company of the Omaha World-Herald.
BRKA closed Monday's regular trading session at $133,034.00, down $1,550.00 or 1.15% on a volume of 385 shares.
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by RTT Staff Writer
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