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Alden Global Capital makes offer to buy Lee Enterprises

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DAVENPORT, IOWA – Hedge fund Alden Global Capital has made an offer to acquire Lee Enterprises. Alden already owns six percent of Lee’s stock. Alden sent a letter to the latter’s board of directors on Monday with an offer to buy the rest for $24 a share, which totals to around $141 million in cash. Alden officials indicated it could complete the acquisition in four weeks.

 “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 to serve local communities,” the offer read. “Our 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.”

Lee issued a news release Monday evening, which confirmed it had "received an unsolicited non-binding proposal from Alden Global Capital, LLC ... to purchase Lee Enterprises for $24.00 per share in cash.

"Lee’s Board of Directors and management team are committed to acting in the best interests of all shareholders," the release stated. "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."

Alden acquired Tribune papers earlier this year, which included the Chicago Tribune and the Baltimore Sun in Maryland. Alden also owns other newspapers that include the Denver (Colo.) Post, New York Daily News, Orange County Register of Anaheim. Calif., and Boston Herald in Massachusetts.

 “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,” the offer read.

Alden has the reputation of significantly cutting costs in newsrooms that it acquires that includes selling the newspaper's real estate and laying off a significant percentage of newsroom staff. The newspaper business has been consolidating as it struggles with a digital transition and shrinking revenues and financial firms like Alden have taken an increasingly prominent role as owners. According to Pew Research, newsroom jobs dropped nearly in half from 2004 to 2018 and the pandemic has exacerbated those stresses.

Charles Arms, a Lee spokesperson, was not immediately available for comment.

The Lee brand expanded by a substantial margin in ‘20 when it bought billionaire Warren Buffett's newspaper chain from Buffett's Berkshire Hathaway. At the time, Buffett said, “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."

Lee owns the St. Louis (Mo.) Post-Dispatch, Buffalo News in New York State and Omaha World-Herald in Nebraska. Locally, Lee operates the Woodford County Journal, the Pantagraph in Bloomington and the Herald & Review.

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