Lee Enterprises asks buyers to assist struggle off hedge fund | Native

OMAHA, Neb. — Newspaper writer Lee Enterprises is asking its shareholders to assist it struggle off a hostile takeover provide from “vulture hedge fund” Alden International Capital.

The writer of The Instances and Democrat, the St. Louis Submit-Dispatch, the Buffalo Information and dozens of different newspapers, together with practically each each day newspaper in Nebraska, despatched a letter to shareholders Monday asking them to help its board nominees within the dispute with Alden. Lee, which is predicated in Davenport, Iowa, already rejected Alden’s $24-per-share provide as a result of it stated the $141 million bid grossly undervalues Lee, however the two sides are locked in a courtroom battle over whether or not Alden will have the ability to nominate its personal administrators.

“A ‘Vulture Hedge Fund’ is in search of to accumulate Lee at a steep low cost. Do not let it take worth that belongs to you,” Lee stated in its letter to shareholders.

Lee Enterprises rejects takeover bid by Alden International

Lee additionally instructed shareholders that they need to place confidence in the corporate’s present technique to shift its publications over to on-line supply as a result of it has seen its digital-only subscriptions develop 65% over the previous 12 months to 402,000 in any respect of its newspapers.

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Alden officers did not instantly reply Monday to Lee’s letter. The New York hedge fund, which is without doubt one of the nation’s largest newspaper homeowners, filed a lawsuit final month asking a decide to power Lee to permit shareholders to vote on its three nominees for the corporate’s board forward of Lee’s March 10 annual assembly.

Lee has argued that Alden’s director nomination was invalid as a result of it did not meet technical necessities the corporate established earlier than its deadline. A trial is scheduled to start Feb. 7 in that lawsuit.

Alden owns greater than 200 newspapers throughout the nation together with the Denver Submit, Orange County Register and Boston Herald, and it purchased up all of Tribune’s newspapers final 12 months. It has developed a fame for utilizing intensive layoffs and extreme value cuts on the newspapers it owns.

When it introduced its provide to purchase Lee in November, Alden stated it already owned 6.3% of Lee’s inventory. Alden first disclosed proudly owning Lee shares in 2020 after the corporate purchased up Berkshire Hathaway’s group of newspapers.

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Berkshire, which is led by billionaire Warren Buffett, has to date been silent on Alden’s takeover provide regardless that it holds all of Lee’s $483 million in debt. On the time Berkshire bought its newspapers, Buffett stated Lee was the very best steward for them. Buffett did not instantly reply Monday to a different request for remark.

Two different hedge funds that every maintain extra Lee inventory than Alden — Cannell Capital and Praetorian Capital — have stated they imagine the corporate is value way more than Alden is providing. Cannell holds 8.2% of Lee’s inventory and Praetorian owns 7.3%.

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Lee’s present board additionally owns or has choices to purchase as much as 10.2% of the corporate’s inventory, in keeping with the proxy assertion Lee filed Monday.

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