* Buffett's company and Graham Holdings in $1.1 billion swap
* Transaction intended to be tax-free
* Berkshire invested in Washington Post Co in 1973
By Jonathan Stempel
March 12 Warren Buffett's Berkshire Hathaway Inc
plans to shed much of its 40-year-old investment in
Graham Holdings Co, the former publisher of the
Washington Post, and swap most of its shares for a Miami
television station and other assets.
According to a Wednesday regulatory filing, Berkshire plans
to turn over more than 1.61 million Graham shares worth in
excess of $1.1 billion. It will receive ABC affiliate WPLG-TV in
Miami, at least $400 million of Berkshire stock now owned by
Graham, and cash.
The swap is designed to be tax-free, saving both companies
millions of dollars. It values the TV station at $364 million,
the U.S. Securities and Exchange Commission filing shows.
"I am sure this is a mutually beneficial transaction for
both companies," Buffett said in a statement. "While this
transaction will greatly reduce our position in Graham Holdings,
our admiration for the company and its management is
Buffett, the world's fourth-richest person, is shedding more
than 90 percent of one of his oldest and most successful
investments and reducing his ties to the Graham family.
The swap would leave Omaha, Nebraska-based Berkshire with
roughly 100,000 of the 1.73 million Graham shares it owns. Those
shares were worth more than $1.2 billion as of Tuesday.
Berkshire paid $11 million for its stake in 1973.
Buffett, 83, had been a longtime confidant of Katharine
Graham, the former Post chief executive officer and mother of
current CEO Donald Graham. Katharine Graham died in 2001, and
Buffett stepped down from the company's board in 2011.
"Warren Buffett's 40-year association with our company has
been extremely good for our shareholders," and WPLG employees
can now join "one of the greatest companies in America," Donald
Graham said in a statement.
The transaction is subject to the completion of final
paperwork, regulatory approval and other conditions.
CALLING IT A DAY
Graham Holdings changed its name from Washington Post Co
after selling its flagship paper last year to Amazon.com Inc
CEO Jeff Bezos.
The Washington-based company's businesses now include
education company Kaplan Inc, as well as other TV stations and
online news website Slate.
"Buffett has been a great friend of the Graham family, but
the business relationship may have run its course after the Post
was sold, and they may have decided to call it a day," said Andy
Kilpatrick, who plans next month to release a revised version of
his book, "Of Permanent Value: The Story of Warren Buffett."
Kilpatrick said the tax-free nature of the transaction made
the swap "a beautiful business deal" for both companies.
Buffett's plans for the TV station are unclear, although it
is not Berkshire's first foray into the media business.
The company already owns dozens of newspapers, including its
hometown Omaha World-Herald. It has more than 80 businesses
overall, including Geico insurance, the BNSF railroad,
MidAmerican Energy and Dairy Queen ice cream.
A spokeswoman said Buffett was not granting interviews on
the transaction with Graham Holdings. Donald Graham was not
immediately available for further comment.
ABC is owned by Walt Disney Co.
In afternoon trading, Berkshire Class A shares were up 0.1
percent at $187,345, and its Class B shares were up 0.3 percent
at $125.03. Graham stock rose 3.3 percent to $732.79.