Berkshire Hathaway exercises Media General warrants


Media GeneralWarren Buffett’s Berkshire Hathaway has acquired newspapers from Media General; it’s provided both a term loan and a revolving credit facility for Media General, and now it has become a part-owner of the company.

The action comes on the heels of the credit agreement between the two companies back on 5/24/12. That arrangement provided MG with a $400M term loan due in 2020, and set it up with a revolver capped at $45M.

Now BH has exercised warrants to acquire 4,646,220 shares of the company’s Class A common stock at $0.01 per share. That gives it 16.6%, or about one sixth, of the 27,918,339 common shares outstanding. According to MG, the action does not require SEC approval since it was not part of a public offering.

“Media General is pleased that Berkshire Hathaway has increased its overall investment in the company by exercising its warrants for the company’s common stock,” said Marshall N. Morton, president and chief executive officer. “This equity position enhances the partnership that began earlier this year when Berkshire Hathaway refinanced our bank debt. The new credit agreement addressed Media General’s long-term capital needs and provided the company with significant financial and operating flexibility. We look forward to a long and constructive association with Berkshire Hathaway,” said Mr. Morton.