Lee Enterprises Inc. has confirmed that it received an unsolicited non-binding proposal from Alden Global Capital, LLC to purchase Lee for $24 per share in cash, or an estimated total of $141 million.
Lee’s Board of Directors and management team “are committed to acting in the best interests of all shareholders,” the company posted Monday night on its website, www.lee.net. “Consistent with its fiduciary duties, and in consultation with its financial and legal advisors, Lee’s Board of Directors will carefully review Alden’s proposal to determine the course of action that it believes is in the best interests of the Company and Lee shareholders. There is no need for Lee shareholders to take any action at this time.”
Davenport-based Lee Enterprises owns the Quad-City Times, The Dispatch and Rock Island Argus, and Muscatine Journal, among newspapers in 77 markets in 26 states. Year to date, Lee’s papers have average daily circulation of 1 million.
“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 Monday statement from Alden, whose newspapers include The Chicago Tribune, Denver Post, The Mercury News, New York Daily News, Orange County Register, Boston Herald, Baltimore Sun and other leading papers across the U.S.
Some of Lee’s properties expressed outrage following the offer from Alden, calling on Lee’s board to reject the deal. The union for the Casper News-Tribune, Wyoming’s largest newspaper, tweeted: “We have seen how Alden has systematically slashed staff across its newsrooms, including those acquired from Tribune Publishing earlier this year.”
“Over the past few years, our news staff has already been significantly reduced, but the cuts are small compared to what has been suffered at Alden-owned papers,” said the Casper News Guild. “Alden has a history of gouging papers and we cannot afford to lose any other positions. We urge the Lee Enterprises board of directors to decline the offer in the interest of preserving quality local news.”
The union for the Omaha World-Herald in Nebraska said their former owner, billionaire Warren Buffett, had a chance to place the paper in trusted, local hands. “He instead turned us over to Lee, saying they would be a good steward,” the union tweeted. “Your move, @LeeEntNews.” It called the board’s upcoming decision “the starkest choice, between a future of news & a bloodsucking crew.”
Among a series of tweets, the Omaha union shared an October 2021 feature from The Atlantic about Alden, which said in part of The Chicago Tribune:
“In May, the Tribune was acquired by Alden Global Capital, a secretive hedge fund that has quickly, and with remarkable ease, become one of the largest newspaper operators in the country. The new owners did not fly to Chicago to address the staff, nor did they bother with paeans to the vital civic role of journalism. Instead, they gutted the place.”
In late January 2020, Lee agreed to acquire Warren Buffett’s BH Media Group’s publications and The Buffalo News for $140 million in cash. Berkshire Hathaway provided approximately $576 million in long-term financing to Lee at a 9% annual rate.
The proceeds from Berkshire financing were used to pay for the acquisition, refinance Lee’s approximately $400 million of existing debt, and provide enough cash on Lee’s balance sheet to allow for the termination of Lee’s revolving credit facility. Subsequent to the deal closing, Berkshire Hathaway became Lee’s sole lender.
Buffett, Berkshire Hathaway’s Chairman and CEO, said at the time: “My partner Charlie Munger and I have known and admired the Lee organization for over 40 years. They have delivered exceptional performance managing BH Media’s newspapers and continue to outpace the industry in digital market share and revenue. We had zero interest in selling the group to anyone else for one simple reason: We believe that Lee is best positioned to manage through the industry’s challenges.”
Starting in July 2018, Lee agreed to manage Berkshire Hathaway’s newspaper and digital operations in 30 markets, under BH Media Group ownership.
In summer 2017, Lee acquired the QC dailies The Dispatch and Rock Island Argus from the Small Newspaper Group, based in Kankakee, Ill., for $7.15 million, and in subsequent months and years, made several staff cuts.
“The Dispatch-Argus is a perfect strategic fit for Lee,” Lee president and CEO Kevin Mowbray said then. “It is adjacent to two of our Iowa enterprises, in Davenport and Muscatine, so this will expand our audiences and create additional synergy opportunities. We expect the acquisition to provide immediate value, accretive to both earnings and free cash flow.”
Alden Global Capital said Monday that its buyout offer represented 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 to Lee’s board said.
On Tuesday morning, Lee Enterprises’ stock price rose again to $24.10. A Lee spokeswoman said Tuesday that Lee has no additional statement beyond what was released yesterday.