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The Deal: Jeff Bezos Buys an Icon in Washington Post Purchase

Stocks in this article: AMZN NYT IACI

NEW YORK ( The Deal) -- (AMZN) founder Jeff Bezos is buying The Washington Post's newspaper business for $250 million, the publisher said Monday, Aug. 5.

Bezos is buying the paper personally, not through Amazon. The deal comes as The Boston Globe and other publications have changed ownership.

The ecommerce tycoon replaces the Graham family as the steward of the paper that broke the story of the Watergate scandal. Bezos paid tribute to the Graham family and the papers' legacy in a note to employees.

"The values of the Post do not need changing," he wrote.

Washington Post Chairman and CEO Donald Graham suggested that Bezos' digital and business acumen, as well as his "personal decency," made him an ideal new owner.

In after-hours trading, shares of The Washington Post gained $31.15, or about 5.5%, to $599.85.

It is the second purchase of a prominent masthead in recent days, following Saturday's announcement that Boston Red Sox owner John W. Henry will pay The New York Times Co. (NYT) $70 million for The Boston Globe and other properties.

Another prestigious publication that was once part of the Washington Post portfolio is also changing hands.

IBT Media is buying Newsweek magazine from IAC/InterActiveCorp. (IACI) Barry Diller-run IAC purchased the magazine from Sidney Harman, who had purchased it from the Washington Post.

The Post's parent company will change its name and regroup around the Kaplan for-profit education company, broadcast and cable assets. The Post will also keep Slate magazine, and Foreign Policy.

The Kaplan business supported The Washington Post as newspaper publishing began to falter. However, the for-profit schools have faced tighter regulation in recent years and have struggled.

More recently, The Washington Post had explored new fields, purchasing industrial combustion systems supplier Forney Corp. and healthcare and hospice company Celtic Healthcare Inc.

Allen & Co. advised The Washington Post.

Written by Chris Nolter.

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