Lee Enterprises Shares Up 83% in Heavy Trading After Paper Buy
January 29 2020 - 1:34PM
Dow Jones News
By Chris Wack
Lee Enterprises Inc. (LEE) shares rose 83% to $2.30 in heavy
trading after the company said it was buying newspaper assets from
Warren Buffett's Berkshire Hathaway Inc. (BRKA).
Volume at 1:00 p.m. ET was 32 million shares, compared with the
65-day average volume of 187,000 shares.
The news company said Wednesday it was buying BH Media Group
publications and The Buffalo News for $140 million in cash. Lee has
managed BHMG's publications since July 2018 under a management
agreement. BHMG's real estate and cash aren't included in the
acquisition.
Berkshire Hathaway will providing $576 million in long-term
financing to Lee at a 9% annual rate, and proceeds from the
Berkshire financing will be used to pay for the acquisition,
refinance Lee's $400 million of existing debt, and provide enough
cash on Lee's balance sheet to allow for the termination of Lee's
$23 million revolving credit facility.
BHMG had 2019 revenues of $373.4 million and adjusted Ebitda of
$47.4 million. Lee said it expects $20 million to $25 million of
anticipated annual revenue and cost synergies.
Lee said the transaction would be immediately accretive to
earnings.
Berkshire Chief Executive Warren Buffett said: "We had zero
interest in selling the group to anyone else."
Write to Chris Wack at chris.wack@wsj.com
(END) Dow Jones Newswires
January 29, 2020 13:19 ET (18:19 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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