Berkshire Hathaway, led by Warren Buffett, disclosed in an SEC filing that it will sell its Class B shares of Graham Holdings Co (NYSE:GHC) back to the company in exchange for WPLG (a Miami-based television station that is a subsidiary of Graham), cash and Class A and B shares of Berkshire Hathaway Inc. (NYSE:BRK.A) owned by Graham. Buffett is the largest owner of the education and media company, with a stake of 1.7 million shares as of year-end 2013, or 28% of the shares outstanding, valued at approximately $1.2 billion. The exact terms of the deal will be determined at closing.
Berkshire Hathaway previously disclosed in a filing that it intends to acquire an unformed subsidiary of Graham Holdings, which could own some assets and a business of Graham.
Other fund managers with large holdings of Graham Holdings Co. (NYSE:GHC) include Mason Hawkins of Southeastern Asset Management (who owns 543,200 shares), Charles de Vaulx of International Value Advisors (with 147,600 shares), John Rogers of Ariel Investments (79,700 shares) and Tom Russo of Gardner Russo & Gardner (75,845 shares).
Graham Holdings Co. (NYSE:GHC) is a $5.2 billion market cap company that owns Kaplan, which provides educational services to individuals, schools and businesses, as well as various media properties in cable television systems, newspaper publishing and television broadcasting. It is also the former owner of the Washington Post, which was sold to Jeff Bezos, the founder of Amazon.com Inc. (NASDAQ:AMZN), in 2013.
Although not within his top 10 holdings, media stocks are well represented within Warren Buffett’s equity portfolio, given their high free cash flow generation and dividends. In addition to Graham Holdings Co. (NYSE:GHC), the famed value investor owns 36.5 million shares of DIREC TV (NASDAQ:DTV), 5.3 million Class A shares of Liberty Media Corp. (NASDAQ:LMCA) and 7.6 million Class B shares of Viacom Inc. (NASDAQ:VIAB).