Lee Enterprises Shares Up 83% in Heavy Trading After Paper Buy

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 [e-mail]

(END) Dow Jones Newswires

January 29, 2020 13:19 ET (18:19 GMT)

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