Buffett’s Bid for Media General’s Newspapers Harvard Case Solution & Analysis

On May 1 2, 2012, BH Media Group, a subsidiary of Warren Buffett's Berkshire Hathaway, announced an offer to purchase Media General's (MEG) paper department for $14-2 million in cash and supply debt financing to the struggling business. Responses from traders and business professionals changed significantly: one called it a "fantastic surprise", another wondered if Buffett was trading along with his heart rather than his brain (he was  a paperboy as a youngster), and a third said it was a "feat of financial engineering." Virtually all of these wondered what the "Oracle of Omaha" observed in the falling U.S. newspaper business that the others didn't. The question confronting Media General's CEO Marshall Morton was whether to take the offer or not. As the the top of an extremely leveraged business whose revenues had fallen 31% in the past four years, whose stock-price was down more than 90% off its high.

This is just an excerpt. This case is about FINANCE & ACCOUNTING.

PUBLICATION DATE: June 21, 2013 PRODUCT #: 213142-PDF-ENG

 

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