OMAHA, Neb. (AP) – Lee Enterprises’ effort to push back against a hostile takeover got a boost this week when a judge ruled that the newspaper’s publisher could ignore two board nominations from the investment fund. Alden Global Capital agency.
But Alden said it would fuel the fight by urging shareholders to vote against Chairman Lee Mary Junck and another longtime board member at the company’s March 10 annual meeting.
Lee Enterprises, based in Davenport, Iowa, said Tuesday that a Delaware judge supported Alden’s decision to deny Alden’s nominations because the hedge fund did not meet Lee’s technical requirements to nominate as a member. board member. Last year, Lee refused Alden’s $141 million offer, saying it “undervalues” his publisher St. Louis Post-Dispatch, The World of Tulsa, Richmond Times-Dispatch, and dozens of other newspapers.
“Now that the Delaware Premier Court has confirmed what we already know – that the Lee Board made the right decision in rejecting Alden’s attempted nominations – Alden has invented brand-new governance complaint, hollowed out in an ongoing and transparent effort to destabilize the company’s board and leadership,” a Lee spokesperson said.
Critics of Alden have also raised concerns about the possibility that the New York hedge fund will impose huge cost-cuts and lay off many people at Lee’s newspapers if they can buy back the company. company. That’s the model Alden has used to increase profits at the more than 200 newspapers it has acquired, including Boston Herald, Chicago Tribune, Orange County Registerand Denver Post.
But Alden, which owns a 6.3% stake in Lee, said it was looking for other shareholders because it believes Lee has underperformed since buying all of Berkshire Hathaway’s newspapers in 2020 and is struggling with the transition to online news publishing.
“We remain steadfast in our commitment to providing Lee with leadership that will improve returns for shareholders and journalism for our readers,” Alden said in a statement.
Alden said they question why Lee has made payments over the past two decades to firms affiliated with Moloney and why the company does business with a personal law firm owned by the company secretary. Lee has defended its business practices and said it is making solid progress in increasing digital subscriptions and online advertising revenue.
Alden became one of the nation’s largest newspaper owners in recent years by purchasing all the publications of the Tribune and MediaNews Group.
Two other hedge funds that hold significant stakes in Lee said they believe the company is worth much more than Alden offers.
Since November when Alden announced his bid, Lee’s stock rallied as high as $44.43 before falling back to current levels in the mid-30s. Shares were trading up 3% around midday Tuesday at $36.59.
By JOSH FUNK, AP Business Writer
https://fox2now.com/news/missouri/judge-backs-post-dispatch-owners-rejection-of-hedge-fund-nominees-as-takeover-fight-continues/ Judge upholds Post-Dispatch owner’s refusal to nominate hedge fund as takeover battle continues