Lee Enterprises rejects takeover bid from Alden hedge fund
Newspaper publisher Lee Enterprises, which owns The News & Advance and other Virginia newspapers, has rejected a takeover offer from the Alden Global Capital hedge fund that is one of the largest newspaper owners in the country with a reputation for intense cost cuts and layoffs.
Lee said Thursday that its board unanimously rejected Alden’s offer to buy the company for $24 per share or about $141 million because it isn’t in the best interests of shareholders. Also Thursday, Lee reported $5.3 million fiscal fourth-quarter profit this year, rebounding from a $1.3 million loss a year ago, as the number of digital-only subscribers at the company grew 65% to 402,000.
“The Alden proposal grossly undervalues Lee and fails to recognize the strength of our business today, as the fastest-growing digital subscription platform in local media, and our compelling future prospects,” Lee Chairman Mary Junck said.
When it made its offer last month, New York-based Alden said it already owned more than 6% of Lee’s stock. Alden didn’t immediately respond to Lee Thursday morning.
After Alden made its unsolicited bid, Lee adopted a “poison-pill” plan that would make it more expensive for Alden to buy up Lee’s shares once it owns more than 10% of the company. Lee also rebuffed Alden’s attempt to nominate three new directors to the company’s board.
At that point, the shareholder rights plan that the Davenport, Iowa-based company adopted would allow its other shareholders to buy shares at a 50% discount at that point or possibly get free shares for every share they already own.
Besides The News & Advance, Lee’s properties include The Richmond Times-Dispatch, the Roanoke Times and the (Charlottesville) Daily Progrss in Virginia; it also owns the St. Louis Post-Dispatch, the Buffalo News and dozens of other newspapers including nearly every daily newspaper in Nebraska.
Alden has scooped up newspapers across the country through a series of acquisitions in recent years, including the purchase of Tribune’s papers earlier this year.
Lee’s stock jumped 12% to $28 a share Thursday morning.
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