"Hedge fund Alden Global Capital’s attempt at a hostile takeover of Lee Enterprises is heating up again," Rick Edmonds reports for Poynter. There are four new developments:
Alden had nominated sympathetic people for Lee's board of directors slots but Lee rejected the nominations. On Feb. 7, a trial begins in Delaware (where the company is incorporated) to decide whether the nominations were valid. "Unless the court sides with Alden, its effort to gain leverage on Lee’s board appears stymied for now," Edmonds reports.
On Jan. 27, Alden issued a statement to Lee shareholders badmouthing the holders of the two seats it's now seeking (the third candidate dropped out). The statement said that former CEO Mary Junck and Herbert Moloney III "are past 70, entrenched for more than 20 years and unwilling to consider alternatives for running the company," Edmonds reports.
Lee has slated its annual meeting for March 10, and issued its own statement seeking shareholders' approval of its slate of nominees.
Lee announced its fourth-quarter 2021 financials Thursday, which Edmonds noted was not directly related to the takeover fight, but would show whether Lee is making rapid progress on digital transformation as management has claimed. Lee reported that total operating revenue increased for the second consecutive quarter. And, though total subscription revenue decreased 1.6% from the previous year, digital-only subscriptions at the end of the quarter totaled 402,000, a 65% increase from last year.
If Alden bought out Lee, a "clear majority" of U.S. dailies would be owned by hedge funds, Sara Fischer reports for Axios. Moreover, it would "essentially create a local news duopoly between Alden and Gannett/Gatehouse," which was created by the two huge chains' merger in 2019.
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