Lee Enterprises said Wednesday it had approved what’s known as a “poison pill” plan to guard against a hostile takeover as it considers New York hedge fund Alden Global Capital’s unsolicited offer to buy it.
The Davenport, Iowa-based company's plan would kick in if Alden gets control of 10% or more of Lee’s stock in the next year. At that point, other shareholders could buy shares at a 50% discount or get free shares for every share they already own. Flooding the market with additional shares would dilute the stock, making it more expensive for Alden to acquire a controlling stake. Alden said in a filing Tuesday it owns 6.1% of Lee.
Lee Chairman Mary Junck said the plan would give the board and shareholders time to consider Alden’s proposal “without undue pressure while also safeguarding shareholders’ opportunity to realize the long-term value of their investment.” Alden, which has become one of the country’s largest newspaper publishers through a series of acquisitions in recent years, offered Monday to buy Lee for $141 million, or $24 per share. Alden said it could complete the acquisition in four weeks.
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Shares closed up 20 cents or less than 1% at $24.43 on Wednesday. They rose another 32 cents after-market, following Lee’s announcement.
Lee owns publications daily newspapers, digital products and over 350 weekly and specialty publications serving 77 markets in 26 states. Its newspapers include the St. Louis Post-Dispatch, The Buffalo News, Omaha World-Herald, The Lincoln Journal Star, The Times of Northwest Indiana and Tulsa World. Alden’s titles include the Chicago Tribune and the Baltimore Sun, which it acquired this summer in its takeover of Tribune Publishing.
Lee is co-owner of Madison Media Partners, which publishes the Wisconsin State Journal and Madison.com.
Austin Huguelet • 314-788-1651
@ahuguelet on Twitter