New York hedge fund and U.S. newspaper consolidator Alden Global Capital LLC has made a proposal to take Lee Enterprises Inc. private in a deal that values the company at around $141 million, reports The Wall Street Journal.
On Monday, Alden Global offered to purchase the Davenport, Iowa-based media company, which has news operations in 77 U.S. markets, for $24 a share in cash. Lee’s shares closed Friday at $18.49 and were up 46% so far for the year. On Monday, shares in Lee jumped 27% to $23.40.
In a statement later Monday, Lee Enterprises said it had received Alden’s bid and would review it.
The bid to buy Lee Enterprises marks the third major acquisition effort by Alden in the past two years, following a failed bid to acquire USA Today owner Gannett Inc. in 2019 and a successful move to purchase Baltimore Sun owner Tribune Publishing this year. Alden Global has been criticized by its employees and industry experts for aggressive cost-cutting, but its executives say the reductions help preserve newspapers.
Around the same time, MNG Enterprises Inc., a company backed by Alden, said it bought a 5.9% stake in Lee and planned to discuss the company’s strategy with its management.
“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 serving local communities,” Alden Global said in a letter to Lee’s board of directors.
Lee Enterprises is one of a few American newspaper chains of considerable size not owned by Alden Global, whose MediaNews Group unit is the publisher of roughly 70 daily newspapers, including the Denver Post and San Jose Mercury News.
The hedge fund has forged an American media empire over the past decade by acquiring newspapers and imposing aggressive cost reductions that critics say amount to gutting local journalism. In an interview with The Wall Street Journal in 2020, Mr. Freeman said he never closed a paper, though he has merged titles to cut costs.
Alden Global in 2019 clashed with USA Today publisher Gannett Co. when it made a bid to acquire the publisher and said that its management team hadn’t demonstrated it was capable of running the company effectively. Gannett rejected the bid and prevailed in a resulting proxy fight, retaining control of its entire board.
Meanwhile, Alden Global was building up its position in another eventual target: Tribune Publishing Co., which it eventually acquired earlier this year despite a rival effort led by hotel executive Stewart Bainum. The deal, which valued the company at $635 million, brought publications such as the Chicago Tribune and New York Daily News under Alden’s umbrella.
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