Alden Launches $142 Million Bid for Publisher Lee Enterprises

(Bloomberg) -- Alden Global Capital, the hedge fund that owns the Chicago Tribune and New York Daily News, offered to buy Lee Enterprises Inc. for about $142 million, seeking a larger share of the struggling newspaper business.

In a letter to Lee’s board, Alden offered $24 a share in cash for the chain, which owns dozens of publications including the St. Louis Post-Dispatch. That’s a 30% premium over Lee’s closing price on Nov. 19.

Alden has built an empire of big-city newspapers, including the Daily News and Denver Post. In May, the group acquired Tribune Publishing Co., adding the Chicago Tribune and Baltimore Sun, despite efforts by Tribune employees to find alternative buyers.

The hedge fund is deeply unpopular in the journalism industry because of its reputation for cutting costs, sparking protests from reporters and editors who work there. An affiliate of Alden owns about 6% of Lee, according to the letter.

Another investor group, Cannell Capital, has been pressuring Lee to restructure its operations, with a greater focus on digital.

In January 2020, Lee agreed to buy newspaper properties owned by Warren Buffett, including the Buffalo News, in a $140 million deal.

Lee has grown through acquisitions like the Buffett deal. Through nine months of 2021, sales rose to $600.7 million from $426.2 million a year earlier. But the company, and the industry, continue to struggle with falling revenue. Excluding acquisitions, Lee’s revenue slumped 4.7%.

Shares of Lee, based in Davenport, Iowa, rose as much as 25% to $23.03 in New York. They were up 46% this year through the close on Nov. 19

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