Lee Enterprises Jumps After Buffett Discloses Stake

Lee Enterprises Inc. (LEE), the owner of newspapers in the U.S. Midwest and West Coast, jumped the most in more than four months after Warren Buffett’s Berkshire Hathaway Inc. (BRK/A) disclosed owning a stake.

Lee climbed 16 percent to $1.33 in New York at the close, for the biggest gain since Jan. 24. The shares have climbed 89 percent this year.

Berkshire held 1.66 million Lee shares on March 31, valued at about $2.12 million, according to a regulatory filing yesterday. Omaha, Nebraska-based Berkshire had withheld information about the stake on May 15 while disclosing other holdings in a filing with the U.S. Securities and Exchange Commission. The company’s request to keep the Lee information confidential was denied. The stake is 3.2 percent, according to data compiled by Bloomberg.

Buffett has been increasing investments in newspapers, buying the Omaha World-Herald last year and striking a deal in May to acquire 63 Media General Inc. (MEG) publications, including the Richmond Times-Dispatch in Virginia. Lee, based in Davenport, Iowa, emerged from Chapter 11 bankruptcy proceedings in January and has more than 40 papers, including the St. Louis Post- Dispatch.

“Our future depends on remaining the primary source of information in certain subjects of great importance to our readers,” Buffett wrote in a letter to publishers and editors of Berkshire’s daily papers last month. “Technological change has caused us to lose primacy in various key areas, including national news, national sports, stock quotations and employment opportunities. So be it. Our job is to reign supreme in matters of local importance.”

Loans Purchased

Berkshire earlier bought $85 million in loans owed by Lee at discount from Goldman Sachs Group Inc., the Wall Street Journal reported in April.

Buffett didn’t return a message for comment left with an assistant yesterday.

“Berkshire Hathaway is a very successful, very smart investor,” Daniel Hayes, a spokesman for Lee, said in a telephone interview. “We’re gratified he’s taken an interest in Lee Enterprises and in our industry.”

The SEC sometimes allows companies to withhold data from the public to limit copycat investing while building or cutting a position. Buffett’s company also requested confidential treatment in filings last year, as he spent more than $10 billion amassing a stake in International Business Machines Corp.

To contact the reporter on this story: Edmund Lee in New York at elee310@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net; Dan Kraut at dkraut2@bloomberg.net

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