Alden Global Capital seeks to buy Lee Enterprises for $144M

Deal would see most Virginia newspapers owned by one company

Published November 22, 2021 by Kate Andrews

Alden Global Capital, the hedge fund that owns The Virginian-Pilot and Daily Press in Virginia, has proposed purchasing Lee Enterprises, the Iowa-based owner of the Richmond Times-Dispatch and most other major Virginia newspapers, for approximately $144 million, Alden announced Monday.

If accepted, the $24 per share purchase price would consolidate 12 of Virginia’s daily legacy newspapers with approximately 330,000 circulation under one company — a firm that is known for eliminating newsroom positions at its assets, including former Tribune Publishing Co. newspapers Chicago Tribune, Denver Post, New York Daily News, Boston Herald and the Baltimore Sun, as well as closing newsrooms, including the Pilot and Daily Press’ offices.

With 6 million outstanding shares, the approximate purchase cost of Lee would be $144 million on a market value of just below $111 million.

Alden owns 6% of the issued and outstanding common stock of Lee, which was valued at $18.49 per share on Friday’s stock market closing, according to Alden’s announcement. The hedge fund has offered an all-cash proposal with no financing conditions. As of 12:30 p.m., Lee stock rose 24.6% to $23 per share.

Among the Virginia newspapers under Lee’s ownership are the Richmond Times-Dispatch; Bristol Herald Courier; The News & Advance in Lynchburg; The Free Lance-Star in Fredericksburg; Martinsville Bulletin; Danville Register & Bee; The News Virginian in Waynesboro; The Roanoke Times; and The Daily Progress in Charlottesville. Lee purchased those papers among 31 it acquired for $140 million in January 2020 from Berkshire Hathaway Inc.

Only seven daily newspapers with presences in Virginia (including The Washington Post and The Washington Times) are not owned by Lee or Alden currently.

Lee has consolidated copy desks for smaller daily newspapers at hubs in Indiana and Wisconsin, eliminating local newsroom jobs. Other Lee newsrooms have seen editorial layoffs since their purchase in 2020.

Lee Enterprises did not respond immediately to requests for comment.

According to the company’s third quarter financial report, total operating revenue was $600.7 million from January to September, compared to $426.2 million through the same period of 2020, up 8%.

Newsroom unions decried the proposed Alden-Lee deal. The Timesland News Guild, which represents Lee-owned Roanoke Times, tweeted, “Staffing at one of [Virginia’s] largest papers, [The Virginian-Pilot], was slashed to the bone after Alden bought it earlier this year.” Robert Zullo, the editor of independent news site Virginia Mercury and a former Times-Dispatch staff writer, called Alden “the grim reaper of the newspaper business.”

The Times-Dispatch union released a statement via tweet: “We urge Lee to reject this proposal, which would be destructive to already-depleted newsrooms across Virginia. … Ownership by Alden would be destructive for them all and for the public’s right to be informed by independent news reporters.”

Last Thursday, union members at former Tribune newspapers now owned by Alden — including the Daily Press and Pilot — announced they would work only eight hours that day and no more, to demonstrate how much unpaid overtime they typically spend working on daily news stories.

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