The attempt by Alden Global Capital to acquire full control of Lee Enterprises group of newspapers has taken an unexpected turn as the stock of Lee has doubled since the initial Alden offering.
In a surprise development as Alden Global Capital pursues a hostile bid to acquire Lee Enterprises, Lee’s shares have shot up in value in the last week. The stock closed Tuesday at more than $36 a share.
Unless the trend reverses, that makes hedge fund Alden’s $24 a share offer a month ago — already rejected by Lee’s board of directors last week — dead in the water.
It now seems likely that Lee can remain independent and pursue its growth plans. An alternative scenario would be for Alden or another suitor to offer a much higher price.
How did Lee’s stock go so quickly from $18 a share before Alden’s bid to double that?
The company declined to comment, but two other investors I spoke with did.
Illustration: Annelise Capossela/Axios
Axios reports (December 15) on Alden’s recent actions:
Alden Global Capital, a hedge fund known for consolidating local news companies for profit, is suing local newspaper company Lee Enterprises, days after Lee’s board unanimously voted to reject Alden’s hostile takeover bid.
Why it matters: It’s the latest escalation of the already bitter battle between the two entities over Alden’s bid for Lee.
Details: In a lawsuit filed by Strategic Investment Opportunities LLC, an affiliate of Alden, plaintiffs argue that Lee Enterprises’ board infringed on company bylaws when it denied Alden’s request to nominate three members to its board due to paperwork issues.
What they’re saying: In a statement, an Alden spokesperson alleged that Lee Enterprises’ “stockholder-unfriendly staggered board” is ” focused more on its own power than what’s best for the company
The big picture: Tension has been building between the two companies ever since Alden first presented its hostile takeover bid for Lee in November.
What to watch: Alden’s initial offer for Lee was $24 per share. Ever since rejecting Alden’s bid, Lee’s share price has soared, closing at over $40 on Wednesday.
One thought on “Newspaper Wars: Lee vs. Alden”
Devil or Demon? Can’t win.
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