May 11 (Reuters) - BuzzFeed said on Monday media entrepreneur Byron Allen will take over as the digital media company's next CEO after he entered into a deal to buy a stake of about 52% in the digital media company for $120 million.
Shares of BuzzFeed soared about 156% in extended trading.
The company has been grappling with a cash crunch as advertisers increasingly shift spending to social media platforms such as TikTok and Meta Platforms' Instagram.
• Under the deal, Allen Family Digital will acquire
40 million BuzzFeed shares at $3 apiece, a 265.9% premium to Friday's closing price.
• BuzzFeed's market capitalization stands at roughly $31 million, according to data compiled by LSEG.
• Upon closing of the deal, BuzzFeed founder & CEO Jonah Peretti will handover charge to Allen and move into a newly created role as president of BuzzFeed AI.
• The deal, expected to close by the end of the month, will be funded with $20 million in cash and a $100 million promissory note due five years after closing, carrying an annual interest rate of 5%, the company said.
• BuzzFeed also reported a 12.4% decline in first-quarter revenue to $31.6 million, while its net loss widened to $15.1 million from $12.5 million a year earlier.
• The company, which withheld its annual forecast, said it expects to provide an update on its financial outlook in the coming months.
• BuzzFeed went public in 2021 through a blank-check merger that valued the company at about $1.5 billion. Its shares have fallen more than 98% since then.
(Reporting by Neil J Kanatt in Bengaluru; Editing by Shailesh Kuber)
