Davenport-based newspaper publisher Lee Enterprises has launched a protective plan against another possible effort to take over the company.
In the Quad Cities region, Lee is the publisher of the Quad-City Times, Moline Dispatch and Muscatine Journal newspapers. It publishes more than 350 weekly and specialty publications serving 73 markets in 26 states.
Lee Enterprises on Friday, March 29, announced that its board of directors has unanimously adopted a limited-duration shareholder rights plan. The rights plan is effective immediately and will expire on March 27, 2025, according to a Lee news release issued today, March 29.
Such plans often have the purpose to discourage any one shareholder from acquiring a controlling amount of stock and to give the company time to consider any offer and what actions it might take to maximize shareholder value.
The move is in response to the significant accumulation of shares of Lee common stock bought by Quint Digital Limited, an entity based in India.
Quint Digital, which now owns more than 12% of Lee, has recently made a significant investment in the company by purchasing shares with a total value exceeding $310,000. This move by Quint demonstrates a growing interest in the newspaper publishing company, known for its focus on local news, information, and advertising, according to the business news website, investing.com.
“The exact reasons for Quint Digital Ltd.’s investment have not been publicly stated, but the market will undoubtedly keep a close eye on any developments that may arise from this increased financial interest in Lee Enterprises,” according to an investing.com report.
Quint, which primarily serves customers in India, offers news through platforms in various categories such as politics, businesses, opinions, entertainment matters, sports, technology aspects, health and fitness, blogs, hot wires, photos and videos, and international news.
In adopting the rights plan, the Lee board considered, among other things, that Quint:
- Rapidly built and increased its ownership position to more than 12.4% of the Lee’s outstanding common stock, and in recent discussions with the company, Quint indicated its intent to continue to accumulate Lee shares,
- Controls a digital publishing business that offers a content management system that seeks to compete with Lee’s subsidiary, BLOX Digital, and
- Highlighted its ownership stake in Lee in its public materials, including a Thursday, Feb. 28, press release that outlines its strategy for expansion into the North American media tech market.
See more on the rights plan here.
“Consistent with its fiduciary duties, the Lee Board determined that based on the circumstances it was necessary to adopt a rights plan to protect the long-term interests of all Lee shareholders,” Mary Junck, Lee’s board chairman, said in the release. “The company has maintained open dialogue with Quint Digital and plans to continue these conversations.”
The rights plan is intended to enable the company’s shareholders to realize the long-term value of their investment, ensure that all shareholders receive fair and equal treatment in the event of any proposed takeover of the company, and to guard against tactics to gain control of the company without paying all shareholders an appropriate premium for that control. The rights plan applies equally to all current and future shareholders and is not intended to deter offers or preclude the Lee board from considering offers that are fair and otherwise in the best interest of the company’s shareholders, according to the Lee news release.
In 2022, Lee survived a hostile takeover attempt by New York hedge fund Alden Global Capital.
Alden wanted to replace Ms. Junck as board chair and one other board member in an attempt to take over Lee Enterprises In 2022. Those efforts ultimately failed.
