Davenport-based newspaper publisher Lee Enterprises has formally rejected a takeover proposal from hedge fund Alden Global Capital.
The Lee Enterprises Board of Directors unanimously voted to reject the unsolicited, non-binding offer. In a statement released Thursday, the board determined that Alden’s $24-a-share offer “grossly undervalues” the newspaper publisher and is not in the best interest of the company and its shareholders.
Alden officials did not respond to a request for comment Thursday morning from the Quad Cities Regional Business Journal.
“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 in a news release. “We remain confident in our ability to create significant value as an independent company focused our (growth strategy).”
Ms. Junck added that the company’s “digital transformation is well underway with strong momentum, as shown in our fourth quarter fiscal 2021 results.”
On Thursday, Lee reported quarterly results that include 37% growth in digital revenue, 65% growth in digital-only subscriptions and 71% growth in revenues from Amplified, Lee’s digital marketing agency.
“The core of Lee’s strength and competitive advantage is steadfast commitment to high-quality local news that is deeply valued in the communities we serve,” Ms. Junck added.
Lee’s stock jumped 12% from closing price Wednesday to $28 a share as of mid-morning Thursday.
On Nov. 22, Alden made an unsolicited bid to take control of Lee for $24 per share in cash.
The newspaper chain later announced that it may launch a “poison pill” plan that has the goal of making it more difficult and more costly for Alden to get controlling stake of the company. The plan would allow its other shareholders to buy shares at a 50% discount or possibly get free shares for every share they already own. The plan would take effect if Alden gets control of at least 10% of Lee’s stock.
Lee Enterprises owns 77 daily newspapers across the nation, including the Quad-City Times, Dispatch/Argus and Muscatine Journal in the Quad Cities region.