Buffett Ups Berkshire's Bet on Struggling Hometown Papers (Update 1)
Updated with Warren Buffett quotes on newspaper business
NEW YORK ( TheStreet) -- After betting on America's banking system during the financial crisis and unveiling a new position in General Motors (GM) that backs a resurgent U.S. auto industry, Warren Buffett is adding to one of his favorite "old school" America bets, buying into another struggling local newspaper company.
On Thursday, Berkshire Hathaway (BRK.A) said it is buying most of the newspapers of Media General (MEG) for $142 million or a near 100% premium to the company's market cap as of Wednesday trading. While the deal is obviously not the $22 billion acquisition that Buffett recently revealed had been under consideration earlier in the year -- nor is it a shot of Berkshire's M&A "elephant gun" -- it is an unequivocal bet on the newspaper industry and the ability of locally based papers with a long-time audience to generate profits and withstand the digital news onslaught.
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