Warren Buffett and Graham Holdings Co (GHC) Announce Agreement To Swap Stakes

Berkshire Hathaway and Graham Holdings Co (NYSE:GHC) have reached an agreement to swap assets. As agreed earlier, Berkshire is set to receive WPLG, a Miami-based television station, a number of Berkshire Class A and Class B shares and cash in exchange for approximately 1.6 million shares of Graham Holdings Class B stock that are currently owned by Berkshire. The specific number of shares was not disclosed, as it will be decided on the day of the transaction, taking into account the closing prices and other factors. According to a recent filing with the Securities and Exchange Commission, Warren Buffett and Berkshire hold approximately 1.72 million Graham Holdings Co (NYSE:GHC) shares, or 27.7% of the total number of shares outstanding.

Graham Holdings Co (NYSE:GHC), an education and media company formerly known as The Washington Post Company, has a market cap of $5.04 billion and pays an annual dividend of $10.20, which represents a yield of 0.37%. The stock has been in an uptrend since November 2012 and has peaked in March at $745.11 per share, trending sideways since then and gaining 3% so far this year. It is traded at a trailing Price to Earnings (P/E) ratio of 26.xx and has a beta of 1.24. Graham Holdings posted revenues of $888 million in revenues and Earnings Per Share (EPS) of $7.88  for the thirteen weeks ending December 31, 2013.

Last month, Berkshire Hathaway reported an increase in its holding of USG Corporation (NYSE:USG), following a conversion of $56.17 million worth of Convertible Senior Notes. Berkshire received, 87.7193 shares per $1,000 principal amount of Notes, thus increasing its stake by 4.93 million to 47.78 million shares. In another move, Warren Buffett boosted his fund’s stake in DaVita HealthCare Partners Inc (NYSE:DVA), taking it to 37.2 million shares, which account for 18% of the company’s common stock.

Disclosure: none.

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