Lee Enterprises enacts poison pill to guard against Alden takeover
Summary
- Shareholder rights plan will be in effect for a year, giving Lee time to assess hedge fund’s acquisition proposal
Lee Enterprises Inc. said its board has approved a shareholder rights plan, also known as a poison pill, that would prevent hedge fund Alden Global Capital LLC from acquiring more than 10% of the company as it considers Alden’s hostile bid for the newspaper publisher.
The plan will be in effect for a year, the company said Wednesday. Lee Enterprises Chairman Mary Junck said the plan would give the company’s board and its shareholders time to assess the acquisition proposal without undue pressure.
“Consistent with its fiduciary duties, Lee’s Board has taken this action to ensure our shareholders receive fair treatment, full transparency and protection in connection with Alden’s unsolicited proposal to acquire Lee," Ms. Junck said in a statement.
Alden Global on Monday offered to acquire Lee in a deal that would value the Davenport, Iowa-based publisher at around $141 million. Alden’s pursuit of Lee is the hedge fund’s third effort to acquire a large local-news publisher in roughly two years, following a failed bid to acquire USA Today owner Gannett Co. in 2019 and a successful move to purchase New York Daily News and Chicago Tribune owner Tribune Publishing earlier this year.
Alden Global has been criticized by employees of its media properties and industry experts for aggressive cost-cutting, while its executives say the reductions help preserve newspapers. In an interview with The Wall Street Journal last year, Heath Freeman, a top executive at Alden Global, said the hedge fund has never closed a paper, though it has merged titles to cut costs.
A spokesman for Alden Global had no immediate comment. The hedge fund said Monday that one of its affiliated entities owns about 6% of Lee Enterprises.
Lee also said that J.P. Morgan is acting as its financial adviser in the matter, with Kirkland & Ellis LLP and Lane & Waterman LLP acting as legal advisers.
Lee Enterprises is one of a few American newspaper chains of considerable size that isn’t owned by Alden Global, whose MediaNews Group unit publishes roughly 70 daily newspapers, including the Denver Post and San Jose Mercury News.
Lee, which owns the St. Louis Post-Dispatch and Arizona Daily Star in Tucson, says its daily newspapers and other local news products reach over 77 markets in 26 states. Its holdings also include the Buffalo News, which it purchased last year as part of an acquisition of Berkshire Hathaway Inc.’s media-group newspaper business for $140 million.
This story has been published from a wire agency feed without modifications to the text
