Buffalo News editor rejects Alden Global Capital's takeover bid.

Newspaper chain Lee Enterprises announced Thursday that it had rejected a takeover bid for New York hedge fund Alden Global Capital, say...

Newspaper chain Lee Enterprises announced Thursday that it had rejected a takeover bid for New York hedge fund Alden Global Capital, saying in a statement that the offer “strongly undervalues” the publisher of 90 dailies including The Buffalo. News, The Omaha World. Herald and The St. Louis Post-Dispatch.

Alden submitted his unsolicited proposal on Nov. 22, offering to buy Lee, a public company, at $ 24 a share, or about $ 141 million. Lee said his board voted unanimously, 8-0, against the offer.

Mary Junck, president of Lee, said in a statement Thursday that Alden’s offering “does not recognize the strength of our business today, as the fastest growing digital subscription platform in the world. local media, and our compelling outlook for the future “.

“We remain confident in our ability to create meaningful value as an independent business,” she said.

J. Carlo Cannell, whose hedge fund is Lee’s largest shareholder with a stake of over 8 percent, is also opposed to Alden’s offer. “I have bigger aspirations for my investors,” Mr. Cannell said in an interview this week, “and I see a path, which won’t be an easy path but it’s not that hard, to completely revamp. the business and develop it. “

Harris Kupperman, chief investment officer of hedge fund Praetorian Capital Management, Lee’s second-largest shareholder, opposed Alden’s proposal in a letter to Lee’s board on Wednesday.

“The purchase price offered by Alden is clearly insufficient and opportunistic, seriously undervaluing the company,” Mr. Kupperman wrote. “Additionally, their proposal comes precisely as the company’s digital transformation gathers momentum, unleashing tremendous value for long-suffering shareholders.”

Alden already owns a 6 percent stake in Lee and is looking to add him to its stable of newspaper publishers. The hedge fund controls around 200 publications through its subsidiary MediaNews Group. In May, he bought Tribune Publishing, the company behind metro dailies such as The Chicago Tribune and The Baltimore Sun, in a deal valued at $ 633 million.

Alden’s critics have said his approach is to buy newspapers and make a profit from them while making drastic cost cuts that are detrimental to local journalism. Alden, who did not immediately respond to a request for comment, said he is saving the dying newspapers.

Mr. Cannell, Ms. Junck, and Mr. Kupperman argued that Lee’s evolution to a digitally-driven business will dramatically increase its value. Also on Thursday, Lee announced in his year-end earnings report that digital subscriptions to his newspapers were up 65%.

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Newsrust - US Top News: Buffalo News editor rejects Alden Global Capital's takeover bid.
Buffalo News editor rejects Alden Global Capital's takeover bid.
Newsrust - US Top News
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