Berkshire Hathaway's acquisition of Post-Newsweek's ABC affiliate in Miami is part of a larger $1.2 billion deal involving a stock swap between Berkshire Hathaway and Post-Newsweek parent Graham Holdings and some cash. The deal values WPLG at $364 million. Post-Newsweek President Emily Barr reassures employees that the group's other five stations are not for sale ."When you are asked (and you will undoubtedly be asked) if Post-Newsweek Stations is for sale, you can emphatically state we are not," she says.
Warren Buffett Buys Post-Newsweek’s WPLG
Warren Buffett’s Berkshire Hathaway Inc. is acquring Graham Holding’s WPLG Miami (DMA 16) in a deal that also involves a swap of stock and cash, it was announced this morning.
Berkshire Hathaway is getting the ABC affiliate, part of Graham’s Post-Newsweek Stations group, along with Berkshire shares currently held by Graham, plus cash.
For that, Berkshire Hathaway will give Graham approximately 1.6 million of the 1.7 million shares that it currently holds in Graham. Based on today’s trading, the Graham stock is worth around $1.2 billion.
In the announcement of the deal, Graham did not break out the value of WPGL. However, Graham’s SEC filing outlining the deal pegs the value at $364 million.
Station broker Larry Patrick said Buffett’s acquisition of a TV station is encouraging. “It should give a tremendous boost to the industry,” he said. “Buffett is recognized as a great value investor in long-term equity. It shows that broadcasting still has a lot of value.”
Speculation has been running high that Graham is interested in spinning off the entire Post-Newsweek group, which also includes WDIV Detroit (NBC), KPRC Houston (NBC), WKMG Orlando, Fla., (CBS) KSAT San Antonio (ABC) and WJXT Jacksonville, Fla. (Ind.)
But an investor relations rep for Graham knocked down such talk. “There’s no plan to put them up for sale,” she said.
Post-Newsweek President Emily Barr reinforced that statement in a memo to group employees that was obtained and posted by TVSpy.
“When you are asked (and you will undoubtedly be asked) if Post-Newsweek Stations is for sale, you can emphatically state we are not,” the memo says. “[Graham CEO] Don [Graham] has asked me to innovate and grow our existing stations, not prepare them for sale.”
“I am sure this is a mutually beneficial transaction for both companies,” said Buffett in a prepared station with the announcement. “While this transaction will greatly reduce our position in Graham Holdings, our admiration for the company and its management is undiminished.”
“Warren Buffett’s 40-year association with our company has been extremely good for our shareholders. Naturally, the deal that we have put together is one that will be good for both companies,” said Graham.
“We thank our longtime colleagues at WPLG for their enormous contributions and congratulate them on the opportunity to join one of the greatest companies in America.”