Alden Global Capital makes offer to acquire Lee Enterprises

Local News

Newspaper company Lee Enterprises owns the Quad-City Times and The Dispatch and Rock Island Argus.

Alden Global Capital, a significant investor in American newspapers, on Monday made an offer to purchase Davenport-based Lee Enterprises, which owns the Quad-City Times, The Dispatch and Rock Island Argus, and Muscatine Journal.

“Our goal is to provide valued news and information to local subscribers nationwide, led by a talented team of seasoned newspaper executives who have worked in journalism for an average of more than 30 years,” according to a statement from Alden, whose newspapers include The Chicago Tribune, The Denver Post, The Mercury News, The New York Daily News, The Orange County Register, The Boston Herald, The Baltimore Sun and other leading newspapers across the U.S.

“As you are aware, an affiliated entity of ours owns approximately 6% of the issued and outstanding common stock of Lee Enterprises, Incorporated (“Lee”),” Alden (a New York City-based investment manager) wrote to the Lee Enterprises board of directors.

“We believe that as a private company and part of our successful nationwide platforms, Lee would be in a stronger position to maximize its resources and realize strategic value that enhances its operations and supports its employees in their important work serving local communities,” Alden wrote, noting its interest in Lee is “a reaffirmation of our substantial commitment to the newspaper industry and our desire to support local newspapers over the long term.”

The company proposes to purchase Lee for $24.00 per share in cash, representing a substantial premium of approximately 30% to Lee’s closing share price of $18.49 on Nov. 19. “We have the ability to fully finance this all-cash proposal and the definitive merger agreement will not include a financing condition,” Alden’s letter said.

Following the review of targeted additional information pursuant to a mutually acceptable nondisclosure agreement, the company expects to complete its work, including negotiation of definitive documentation, in approximately four weeks.

“We are keenly interested in working constructively with the Lee Board of Directors (the “Board”), with the goal of getting to a successful transaction with value, speed and certainty,” Alden’s letter said. “Scale is critical for newspapers to ensure necessary staffing and in order to thrive in this challenging environment where print advertising continues to decline and back office operations and legacy public company functions remain bloated, thus depriving newsrooms of resources that are best used serving readers with relevant, trustworthy and engaging content.”

Davenport-based Lee Enterprises is a major subscription and advertising platform and a leading provider of local news and information, with daily newspapers, rapidly growing digital products and over 350 weekly and specialty publications serving 77 markets in 26 states. Year to date, Lee’s newspapers have average daily circulation of 1 million, and its legacy websites, including acquisitions, reach more than 47 million digital unique visitors.

Lee’s markets include St. Louis, Mo., Buffalo, N.Y., Omaha, Neb., Richmond, Va., Lincoln, Neb., Madison, Wis.; and Tucson, Ariz. Its stock price increased 23 percent Monday morning, to $22.74, following the Alden offer. For more information, visit www.lee.net.

Alden Global Capital has a ruthless reputation as a cost-cutter in newsrooms nationwide. A 2020 Vanity Fair feature on it was headlined: “The Hedge Fund Vampire That Bleeds Newspapers Dry Now Has The Chicago Tribune By the Throat.”

The subhead — “In its mission to squeeze the last profits out of newspapers, Alden Global Capital has eliminated the jobs of scores of reporters and editors, and decimated journalism in cities all over the country: Denver, Boston, San Jose, Trenton, etc. Next up: Chicago, Baltimore, and the New York Daily News.

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