November 22, 2021

Alden Capital continued its drive to own as much of the American newspaper industry as it can with a bid Monday to acquire Lee Enterprises, a publicly traded chain of 75 daily newspapers and several hundred other outlets.

Alden said that its offer of $24 a share represents a 30% premium on Lee’s closing stock price Friday.

Lee’s largest papers include the St. Louis Post-Dispatch, the Arizona Daily Star, The Buffalo News, the Omaha World-Herald and the Richmond Times-Dispatch. The latter three were part of Warren Buffett’s BH Media, acquired by Lee in January 2020 when the billionaire decided to exit the business.

Alden acquired Tribune Publishing just this summer after a contentious battle with a private investor group that tried unsuccessfully to mount a competing bid. That brought the Chicago Tribune and other major metros like The Baltimore Sun and Orlando Sentinel into the Alden fold, which already included The Denver Post and groups in northern and southern California.

The hedge fund has developed a reputation for slashing staff in newsrooms and other departments and selling off real estate at outlets it owns. It announced cuts at Tribune as soon as the deal closed. Besides investing little in news, it lags the industry in technology upgrades.

Alden took up a 6% position in Lee earlier, a signal of its probable takeover interest.

By my calculation from Yahoo Finance statistics, the deal is valued at roughly $686 million. That includes a cash payment of $133 million for shares that an Alden affiliate does not already own and assumption of debt of $553 million.

Alden said that it was prepared to close the transaction as soon as four weeks.

Lee shares were trading at $22.96 at lunchtime, an indication that the market thinks the deal is likely but not certain to go through.

Lee did not immediately reply to an email request for comment.

Alden’s acquisitions have been part of a wave of consolidation sweeping the regional newspaper industry. GateHouse bought Gannett two years ago (keeping the Gannett name) and now owns roughly 250 of the industry’s 1,300 dailies.

Chatham Asset Management bought McClatchy and its 30 dailies at a bankruptcy auction in summer 2020. There are also several large private chains including Hearst and Advance Local.

This article was updated to include the price of Lee shares as of lunchtime Eastern time.

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Rick Edmonds is media business analyst for the Poynter Institute where he has done research and writing for the last fifteen years. His commentary on…
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