A judge in Delaware has cleared the way for newspaper publisher Lee Enterprises to use a voting system that will ensure two longtime directors are reelected at its annual meeting in a couple weeks.
The Alden Global Capital hedge fund, which has launched a hostile takeover bid, asked the judge to force directors to receive a majority of all votes cast instead of just 1 more vote than any other candidate for their position
Iowa-based Lee issued a statement Friday praising what it called “the second court ruling in less than two weeks rejecting Alden’s desperate efforts to destabilize Lee and push its grossly undervalued proposal to purchase the company.”
Lee rejected Alden’s offer of $24 a share or about $141-million in December, triggering multiple attempts by the hedge fund to get its supporters on the Lee board.
Alden, which has a reputation for imposing severe cuts and layoffs at its more than 200 newspapers, owns 6.3% of Lee’s stock.
It claims a change of leadership is needed because Lee has delivered disappointing results since buying all of Berkshire Hathaway’s newspapers in 2020.
Lee disagrees, saying it’s making good progress in growing its online ad revenue and digital subscriptions..
The Lee board has the backing of 2 other hedge funds with larger Lee holdings than Alden. They say Lee is worth significantly more than Alden’s $24 a share offer. Lee closed Friday at $33.85 per share.
Among Lee’s holdings are the Chadron Record, Rapid City Journal, Casper Star Tribune, and nearly all the daily papers in Nebraska, including the Omaha World Herald and Lincoln Journal Star.