Berkshire Hathaway exercises warrants for Media General stock

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Berkshire Hathaway Inc. has exercised warrants to purchase 4.6 million shares of Media General stock.

Berkshire Hathaway, the Omaha, Neb.-based company run by legendary investor Warren Buffett, bought 63 newspapers from Richmond-based Media General earlier this year for $142 million.

When the newspaper sale was announced in May, the two companies also unveiled a separate credit agreement under which Berkshire Hathaway would provide Media General with a $400 million term loan and $45 million revolving credit line.

As part of that deal, Media General provided Berkshire Hathaway with warrants to buy Media General Class A stock at an exercise price of 1 cent each.

Based on Monday’s closing price for Media General Class A stock, Berkshire Hathaway’s shares are worth more than $23 million. Berkshire Hathaway’s stake represents 16.6 percent of the 27.9 million Media General common shares outstanding.

With the sale of the newspapers, Media General has become primarily the owner of television stations. The company’s holdings include 18 network-affiliated broadcast TV stations and their associated digital media and mobile platforms. 

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