New York hedge fund Alden Global Capital is making a bid to purchase Lee Enterprises, the owner of the Omaha World-Herald and most other daily newspapers in Nebraska.
According to a press release from Alden, it sent a letter to Lee’s board of directors offering $24 a share for Lee stock, which it said was a premium of 30% on Lee’s Friday closing price of $18.49. The offer amounts to about $141 million.
Lee, based in Davenport, Iowa, confirmed in a statement Monday evening that it had received an unsolicited acquisition proposal from Alden. It said the company’s board would carefully review it to determine the best course of action for the company and its shareholders.
Lee bought The World-Herald from Berkshire Hathaway in January 2020 after Warren Buffett made the decision to sell his hometown newspaper and Berkshire’s other newspaper holdings, plus Buffett’s separately held Buffalo News.
According to the Poynter Institute, a nonprofit institute that studies journalism, and other industry observers, Alden has developed a reputation for acquiring newspapers and then cutting staff in newsrooms and other departments and selling real estate. It acquired Tribune Publishing, owner of the Chicago Tribune and other publications, earlier this year and announced cuts as soon as the deal closed.
Steve Waldman, president of Report for America, an organization that places journalists in local newsrooms, called news of Alden’s latest attempted acquisition “a wake-up call.”
“What we have seen in the past, especially with Alden, is that it has led to cuts in reporting staffs, and worse and worse coverage of communities in many cases,” he said. “We just can’t keep accepting these mergers as if there’s nothing we can do (about) them.”
Waldman called on the Justice Department to examine the deal for its impact on communities.
In a series of tweets Monday, the union for The World-Herald’s journalists decried a takeover by Alden, calling the hedge fund “awful” and “mercenaries” that gut newsroom staffs and raise subscription prices in an attempt to wring money out of papers.
The union said that Alden cares nothing for Nebraska and that its “rampant cuts would do irreparable harm to our ability to cover our communities and to uncover corruption, wasteful spending, abuse of public trust, even the triumphs and travails of Nebraska’s favorite pastime.”
Lee’s other large newspaper holdings include the St. Louis Post-Dispatch, the Arizona Daily Star, the Buffalo News and the Richmond Times-Dispatch. It owns numerous Nebraska dailies, among them the papers in Lincoln, Grand Island, North Platte, Kearney and Scottsbluff.
The newspapers Alden owns include the Denver Post, the Mercury News, the New York Daily News, the Orange County Register, the Boston Herald and the Baltimore Sun.
Alden said in its release that with print advertising declining nationally, scale is critical for newspapers to ensure necessary staffing to provide content.
It suggested that back office functions in the industry “remain bloated.” It also said it wanted to move quickly on the offer, within four weeks.
“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 said in its release.
On news of the offer, Lee stock closed at $23.40 on Monday, up almost 27%.