(May 12): Comedian and media mogul Byron Allen is paying US$120 million for a 52% stake in online publisher BuzzFeed Inc and will assume the titles of chairman and CEO from co-founder Jonah Peretti.
Allen’s family office is acquiring 40 million shares at a price of US$3 each, according to a statement from the company on Monday. The transaction will be financed with US$20 million in cash and a US$100 million promissory note due in five years and accruing interest at 5% annually. It is expected to close at the end of the month. Peretti will transition to the new role of president of BuzzFeed AI.
The New York-based company was once a darling of the digital media world, racking up page views with its popular online quizzes and attracting investment from the likes of Comcast Corp. A foray into movie making did not pan out, however, and its core online news business began to struggle. Layoffs and divestitures followed and the company sought outside sources of capital.
BuzzFeed, whose business includes the HuffPost, Tasty and BuzzFeed Studios, reported a nearly 20% decline in advertising sales for the first quarter and a net loss of US$15.1 million. The company said it was planning significant changes, including cost reductions, to prepare for the transition in ownership.
Allen, whose assets include the Weather Channel and 13 local TV stations, has been in deal-making mode lately. In March he bought a stake in the Starz cable channel and streaming service from former US Treasury Secretary Steven Mnuchin. He’s also set to take over the late-night slot on CBS occupied by Stephen Colbert when that show goes off the air next week. Allen’s company bought the time on the network and plans to air syndicated comedy programmes.
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