Lee Enterprises, a major media company based in Iowa, rejected an unsolicited buyout offer from Alden Global Capital, a hedge fund known for drastically downsizing the newspapers it owns.
In a Thursday morning announcement, Lee’s board chair Mary Junck said Alden’s $141 million proposal “grossly undervalued” the newspaper company and its growing digital business.
“We remain confident in our ability to create significant value as an independent company and are focused on our Three Pillar Digital Growth Strategy, detailed earlier this year. We have demonstrated accelerating momentum across our platforms as we execute our plan,” Junck said in a statement.
Last month, Alden Global Capital revealed a proposal to purchase Lee Enterprises and its newspapers at $24 a share, casting alarm through the many newsrooms owned by Lee.
If approved, Alden would take over the St. Louis Post-Dispatch, the Omaha World-Herald, the Sioux City Journal and 21 other daily newspapers throughout Missouri, Iowa and Nebraska. Lee owns twelve newspaper in Nebraska.
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In a separate statement released Thursday morning, Lee reported new growth in its fourth-quarter results. The company saw 37% growth in digital revenue and 65% growth in digital-only subscriptions, according to the statement.
“The Alden proposal grossly undervalues Lee and fails to recognize the strength of our business today, as the fastest-growing digital subscription platform in local media, and our compelling future prospects,” Junck said in the statement.
The board’s decision comes after pushback against Lee’s proposal from the newspaper companies’ unions, and the company itself, which adopted a poison pill strategy to fend off Alden’s takeover bid.
On Wednesday the paper’s second-largest shareholder Harris Kupperman demanded the newspaper company reject Alden’s offer, calling it “insufficient and opportunistic.”
“Let me be blunt. I simply do not understand what needs to be evaluated here,” Harris wrote. “Alden’s proposed purchase price is clearly insufficient and opportunistic, grossly undervaluing the business.”
The Omaha World-Herald union’s Twitter account stated Lee must remain “vigilant.”
“We must remain vigilant — this offer won’t be the assassin’s last,” the post read. “Alden not only grossly undervalues journalism, it grossly undermines it.”
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