Stock Alert: LEE Stock Jumps 66% After Buying Berkshire Hathaway's Publications

(RTTNews) - Shares of local news provider Lee Enterprises, Inc. (LEE) jumped 66.67% on Wednesday after the company announced its acquisition of Berkshire Hathaway's entire newspaper operations for $140 million in cash.

The acquisition is expected to immediately add to Lee's earnings with $20-25 million annual revenue and cost synergies. Lee expects to achieve the full synergy run-rate within 24 months of closing of the deal, that is expected in mid-March 2020.

The stock, which has been trading in a range of $1.18- $3.69, closed yesterday's trading at $2.10.

Berkshire Hathaway Media Group owns the print and digital operations of 30 daily newspapers, as well as more than 49 paid weekly publications with digital sites and 32 other print products. Lee operates 46 daily newspapers and a joint interest in two others, along with digital products, and nearly 300 specialty publications in 21 states.

As per the deal, Berkshire Hathaway becomes the sole lender of Lee by providing approximately $576 million in long-term financing to Lee at a 9% annual rate. Lee plans to use the proceeds to pay for the acquisition, refinance Lee's approximately $400 million of existing debt, and provide enough cash on the balance sheet to allow for the termination of revolving credit facility.