Hedge fund Alden Global Capital has offered to buy newspaper chain Lee Enterprises for about $141 million dollars.
One of the country’s largest newspaper owners with a reputation for intense cost cuts and layoffs, Alden already owns 6% of Lee’s stock and is proposing to buy the rest for $24 a share
Lee papers include the Denver Post, Chicago Tribune, Chadron Record, Rapid City Journal, Omaha World Herald, Scottsbluff Star Herald, and the Casper Tribune.
In March of last year, Lee completed the acquisition of Berkshire Hathaway’s BH Media – 30 daily newspapers, 49 weeklies with digital sites, and 32 other print products.
The deal also had Berkshire Hathaway become Lee’s sole lender with some $576-million dollars in long-term financing at 9% interest that was used to pay for the acquisition, refinance Lee’s existing debt, and terminate its revolving credit lines.
Alden’s buyout offer for Lee drew a quick and strong negative response from the unions representing workers at those papers and from other journalism professionals.
University of Missouri School of Journalism Professor Kathy Kiely calls Alden “a vulture fund” that “cuts its newspapers to the bone with the proposed purchase of Lee “a disaster for democracy.”
Kiely says the type of behavior Alden has shown at its papers puts “greed and self-dealing above democracy,” adding that it’s “a dagger to the heart of democracy.”