Berkshire Hathaway to Invest in E.W. Scripps

HFA Padded
Dr. David Kass
Published on
Updated on

In an E.W. Scripps press release yesterday, it was revealed that Berkshire Hathaway was planning to assist in the company’s $2.65 billion acquisition of ION Media:

Q2 2020 hedge fund letters, conferences and more

Berkshire Hathaway Warren Buffett

Berkshire Hathaway investment highlights

  • Amount of preferred stock: $600 million
  • Dividends: 8% per year if paid in cash; 9% if deferred
  • Redemption: The preferred stock will have no maturity date but will be redeemable starting five years after issuance.
  • Warrant: Berkshire Hathaway to receive a warrant to purchase up to 23.1 million Scripps Class A shares at $13 per share. Berkshire may exercise the warrant at any time but no later than one year after all preferred stock has been redeemed.
  • Other considerations: While the preferred stock is outstanding, Scripps cannot issue a dividend or repurchase shares.
  • Governance: Berkshire Hathaway will not receive any board seats and will have no other governance rights.

Article by Dr. David Kass

HFA Padded

David I Kass Clinical Associate Professor, Department of Finance Ph.D., Harvard University Robert H. Smith School of Business 4412 Van Munching Hall University of Maryland College Park, MD 20742-1815 Phone: 301-405-9683 Email: dkass@rhsmith.umd.edu (link sends e-mail) Dr. David Kass has published articles in corporate finance, industrial organization, and health economics. He currently teaches Advanced Financial Management and Business Finance, and is the Faculty Champion for the Accelerated Finance Fellows. Prior to joining the faculty of the Smith School in 2004, he held senior positions with the Federal Government (Federal Trade Commission, General Accounting Office, Department of Defense, and the Bureau of Economic Analysis). Dr. Kass has recently appeared on Bloomberg TV, CNBC, PBS Nightly Business Report, Maryland Public Television, Business News Network TV (Canada), Fox TV, American Public Media's Marketplace Radio, and WYPR Radio (Baltimore), and has been quoted on numerous occasions by Bloomberg News and The Wall Street Journal, where he has primarily discussed Warren Buffett and Berkshire Hathaway. He has also launched a Smith School “Warren Buffett” blog. Dr. Kass has accompanied MBA students on trips to Omaha for private meetings with Warren Buffett, and Finance Fellows to Berkshire Hathaway’s annual meetings. He is an officer of the Harvard Business School Club of Washington, DC, and is a member of the investment and budget committees of a local nonprofit organization. Dr. Kass received a Smith School “Top 15% Teaching Award” for the 2009-2010 academic year.