In a move that industry watchers could have seen coming, Iowa-based Lee Enterprises is buying Warren Buffett’s BH Media Group’s publications and The Buffalo News for $140 million in cash.
Lee has managed BHMG’s publications since July 2018 under a management agreement. Buffett has been pulling away from the industry for some time and has expressed doubts about the long-term viability of many operations.
In the deal, Buffett’s Berkshire Hathaway, BH Media parent, is providing approximately $576 million in long-term financing to Lee at a 9 percent annual rate. The proceeds from the Berkshire financing will be used to pay for the acquisition, refinance Lee’s approximately $400 million of existing debt and provide enough cash on Lee’s balance sheet to allow for the ending of Lee’s revolving credit facility, Lee says. Subsequent to the deal closing, expected in March, Berkshire Hathaway will be Lee’s sole lender.