Newspaper publisher Lee Enterprises has rejected a takeover attempt by the Alden Global Capital hedge fund that is one of the largest newspaper owners in the country, with a reputation for intense cost cuts and layoffs. But the fight over the company's future is likely far from over, the AP reports. Lee said Thursday that its board unanimously rejected Alden's offer to buy the company for $24 per share, or about $141 million, because it isn't in the best interests of shareholders. Also Thursday, Lee reported a $5.3 million fiscal fourth-quarter profit this year, rebounding from a $1.3 million loss a year ago, as the number of its digital-only subscribers grew 65% to 402,000.
"The Alden proposal grossly undervalues Lee and fails to recognize the strength of our business today, as the fastest-growing digital subscription platform in local media, and our compelling future prospects," Lee Chairman Mary Junck said. But Ken Doctor, a longtime media analyst who now runs a local online journalism startup called Lookout Santa Cruz in California, said Alden isn't likely to abandon its bid to acquire Lee because it believes it can extract profits from the company with the model it has used elsewhere, which calls for selling off the real estate the chain owns and drastically cutting costs.
"What Alden has done—and it's now pretty proven community to community—it's harvesting the last profits out of the newspaper business, and it is doing that unapologetically," Doctor said. Alden said last month when it made its offer that it already owned more than 6% of Lee's stock. The New York-based hedge fund didn't immediately respond to Lee on Thursday. Even if Lee succeeds at turning away Alden, it will likely face pressure to sell itself to someone else in the next couple of years or find a suitor willing to take the company private. Lee owns the St. Louis Post-Dispatch, the Buffalo News and dozens of other newspapers including nearly every daily newspaper in Nebraska.
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