Lee Enterprises Jumps 63% After Buying Berkshire Newspapers

By Chris Wack

Lee Enterprises Inc. (LEE) shares rose 63%, to $2.05, after the company said it was buying newspaper assets from Berkshire Hathaway (BRKA).

The news company said Wednesday it would buy 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 are excluded from 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.

Write to Chris Wack at chris.wack@wsj.com

(END) Dow Jones Newswires

January 29, 2020 08:52 ET (13:52 GMT)

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