Media Fortune Fame & Folly

Alden bids for Lee papers

In the consolidating US market for local news, Alden Global Capital is now seeking to add Lee Enterprises to its local news holdings in a deal which values the company at $141m, a premium of one-third on the closing share price of the company last Friday. Alden already owns 6% of the shares.

Lee Enterprises was founded in 1890 and has a stable of 90 dailies across 26 US states, including: Omaha World Herald, the Richmond Times-Dispatch, and the Buffalo News. Many of the company’s titles were previously owned by Warren Buffett and were bought by Lee Enterprises in 2020 (that deal was worth $140m but included a mix of weeklies and dailies).

Lee Enterprises has responded to the offer by putting forward a “shareholder rights plan” which limits Alden to taking no more than 10% of the company’s equity while the offer is under consideration in an arrangement that would last for a calendar year.

Alden owns 200 news titles through its Media News Group subsidiary and has a reputation for fierce post-acquisition cost-cutting. The company completed its $633m acquisition of Tribune Publishing earlier this year. It is second in the US local news market to Gannett.

This latest proposed deal is controversial in more ways than one. The Omaha World-Herald News Union leader described the bid as devastating: “They (Alden) hide in the shadows but they’re the worst of newspaper owners. They care about nothing but the bottom line and pounce on this notion that newspapers are dead or a dead medium — and that’s just not true.”

Lee Enterprises traces its origins back to 1890 and Mark Twain wrote for the Muscatine Journal, which it still owns. When the company bought the Post-Dispatch in 2005 from Pulitzer Inc. for $1.46bn, Cannell Capital (a hedge fund that owns nearly 7% of Lee Enterprises) described it as a “near-fatal acquisition” and noted the newspaper owner’s stock has dropped 93% since then.

Alden Global Capital