Lee Enterprises rejects Alden’s $144M purchase offer

Buy would have consolidated 33 Va. newspapers under hedge fund

Published December 9, 2021 by Kate Andrews

Lee Enterprises Inc.’s board unanimously rejected Alden Global Capital’s $144 million buyout offer made last month, saying it “grossly undervalues” the company and its newspapers, which include 31 publications in Virginia.

“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 in a statement released Thursday. “We remain confident in our ability to create significant value as an independent company.”

Alden, the hedge fund that owns The Virginian-Pilot and Daily Press in Virginia, as well as other former Tribune Publishing Co. newspapers, proposed purchasing Iowa-based Lee at $24 a share. If successful, the purchase would have placed 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 the 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.

Lee newspapers’ newsroom unions decried the prospect of Alden ownership, urging the board to reject the offer.

“Alden has cut their staffs at twice the rate of competitors, resulting in the loss of countless jobs,” the unions’ open letter reads. “They’ve fostered unhealthy and untenable workplaces that make it impossible to retain talent. They’ve shuttered physical newsrooms to leave journalists working from their cars, and at properties they lease, Alden stiffs local landlords for the rent. Their investment history is littered with bankruptcies and federal probes, and they use secretive money to fund their shady dealings.”

Among the signatories were the Richmond Newspapers Professional Association, representing newsroom employees at the Richmond Times-Dispatch; Blue Ridge NewsGuild, representing The Daily Progress in Charlottesville; and Timesland News Guild, The Roanoke Times’ newsroom union; as well as unionized newsrooms in Nebraska, Illinois, Iowa, Wisconsin, Montana, New York, Washington and the national United Media Guild.

Lee’s board previously took action to prevent a hostile takeover by Alden, which owns more than 6% of Lee’s stock. Lee’s board adopted a “poison pill” plan that would allow other shareholders to buy shares at a 50% discount or possibly get free shares if Alden gains control of more than 10% of Lee’s stock.

Lee owns 31 newspapers in Virginia, purchased in January 2020 from a subsidiary of Berkshire Hathaway Inc., Warren Buffett’s firm. Among the Virginia newspapers under Lee’s ownership are the 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.

Lee reported strong fourth quarter fiscal 2021 results with 37% growth in digital revenue and 65% growth in digital-only subscriptions, the company reported Thursday.

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