Lee Enterprises got a boost this week in its efforts to repel a hostile takeover by the Alden Global Capital hedge fund when a judge ruled the newspaper publisher could ignore two director nominations
Lee is one of the largest newspaper chains in the country with papers that include the Chadron Record, Rapid City Journal, Casper Star Tribune, and nearly all the daily newspapers in Nebraska.
Alden revealed in November it owns 6% of Lee stock, then offered $24 a share to purchase the rest. Lee rejected the roughly $141-million dollar offer, saying it “grossly undervalues” the company.
Alden then nominated 2 candidates for the Lee board, a tactic it has used successfully in past takeovers, but Lee rejected the nominations, saying they failed to follow the process including missing the filing deadline.
A Delaware judge has affirmed the rejection of the Alden nominees, which Lee calls in a statement “a proper decision,” but the hedge fund has launched a new attack – urging Lee shareholders to vote against board chairman Mary Junci and a second member, accusing them of putting their own interests above shareholders..
Alden says Lee has made payments over the last 2 decades to companies associated with Moloney and has done business with the personal law firm owned by its corporate secretary. Lee says the hedge fund “has invented entirely new hollow complaints in its continuing and transparent attempt to destabilize the board.
Alden says it’s just looking out for other shareholders because Lee hasn’t met expectations since acquiring all of Berkshire Hathaway’s papers in 2020 and is struggling to transition to publishing primarily online.
Lee rejects the claim, pointing to a 62% increase in digital subscriptions last year and the fact that two other hedge funds with larger Lee holdings than Alden fully agree the company is worth much more than the Alden Capital offer. Lee stock jumped as high as $44.43 after Alden’s bid and is now in the mid $30s.
Alden is one of the largest newspaper owners in the country after buying up all of the Chicago Tribune and MediaNews Group publications. It’s reputation is for extreme cost cuts and extensive layoffs after it buys a newspaper.