Warren Buffett buys 3.2% stake in Lee Enterprises

Warren Buffett hoped Berkshire Hathaway could keep quiet about its investment in struggling Lee Enterprises, but the SEC wouldn’t allow it. On Tuesday, the billionaire investor disclosed that Berkshire purchased 1.66 million shares of Lee, or about 3.2% of the newspaper chain, earlier this year. (Lee publishes 48 dailies, including the St. Louis Post-Dispatch.)

Berkshire Hathaway now owns or has stakes in the Washington Post, Omaha World-Herald, Buffalo News, Media General newspapers and Lee papers.

Seeking Alpha contributor Sammy Pollack writes:

It is likely that Buffett wanted to keep the position from being disclosed because he intends on buying more shares. Also, it is unlikely that Buffett would have started accumulating the stock if he was only interested in 1.66 million shares. Perhaps Buffett will slow his buying now that shares have moved significantly, but on a pull back I believe Buffet will continue to buy LEE. Ultimately, Buffett could be interested in buying the whole company.

Erik Holm of the Wall Street Journal reports: “The last time Berkshire was permitted to keep a new investment hidden for a time, Buffett was building a new position in IBM last year. The stake now amounts to about 5.6% of IBM’s outstanding shares.”

In Wednesday pre-market trading, Lee shares were up more than 20% — from $1.15 to $1.40.

* Berkshire Hathaway reveals 3.2% stake in Lee (St.Louis Business Journal)
* Buffett buys Lee Enterprises, should you? (Seeking Alpha)
* Earlier: Layoffs at Lee papers as CEO gets $500,000 bonus (JimRomenesko.com)
* Earlier: Lee declares bankruptcy, but execs get 30%-plus bonuses (JimRomenesko.com)