Updated from 10:50 a.m. ET to include closing share prices and calculations of Graham Holdings exchange
NEW YORK (TheStreet) -- Warren Buffett may be perfecting a new way for Berkshire Hathaway to exit its large investments. On Wednesday, Berkshire Hathaway (BRK.A) and Graham Holdings (GHC) agreed to a deal where the Warren Buffett-run company will acquire Miami TV station WPLG, cash and Graham Holdings shares in Berkshire Hathaway in exchange for Berkshire's 1.6 million share stake in the former owner of the Washington Post.
Berkshire Hathaway's deal essentially cashes out the investing conglomerate from its long-standing investment in Graham Holdings. But Berkshire won't sell a single share in the deal, even as it forks over about 21% of graham Holdings' stock.
Instead of selling shares on the open market, Berkshire will give its 1.6 million shares back to Graham for a TV station, cash and Berkshire shares that Graham Holdings acquired during a long-relationship between Buffett and the newspaper's founding family.
The Miami TV station will be valued at $364 million, and Graham Holdings will fork over $327.7 million and $400.3 million worth of Berkshire shares, as part of the deal, according to an 8-K filing with the Securities and Exchange Commission. Berkshire Hathaway will retain between 91,490 and 111,716 shares in Graham Holdings depending on the trading prices of both firms as the exchange closes.
For Berkshire Hathaway, the deal is more of an estate sale than anything. Buffett held onto a large chunk of Graham Holdings shares for decades amid the chronic decline in the newspaper industry, partly out of a relationship he had with the Graham family and particularly Katherine Graham. "I can afford to be sentimental," Buffett said of Berkshire's investment in Graham Holdings.