Lee Enterprises fought off Alden Global Capital, but now faces pressure from another hedge fund, Cannell Capital

"Newspaper publisher Lee Enterprises is facing renewed pressure from a hedge fund to speed up its transition to digital publishing and consider adding new digital-savvy leaders to its board after successfully fighting off a hostile takeover from a different hedge fund," Josh Funk reports for The Associated Press. "Lee’s largest shareholder, Cannell Capital, this week disclosed buying nearly 20,000 more of the company’s shares, giving it a 9.1 percent stake. The fund’s head, Carlo Cannell, said he thinks Lee needs new board members and executives with experience running a digital publishing business."

Carlo Cannell said he had some, but "not a lot" of confidence in Lee's management. "His company and another hedge fund that owns a large stake in Lee, Praetorian Capital, also questioned the amount Lee spent on advisers as it was fending off a $24-per-share takeover offer from another fund, Alden Global Capital. But the investor who leads Praetorian, Harris Kupperman, has indicated that he is more comfortable with the company’s current direction," Funk reports. "Cannell Capital has been prodding Lee to make changes for several years. That includes running a 2019 campaign encouraging shareholders to vote against three board members, including Lee Chairman Mary Junck, and announcing last September that it planned to vote against all incumbent Lee board members."

Tim Franklin, senior associate dean of Northwestern University’s Medill School of Journalism and former president of The Poynter Institute, said Lee's troubles with hedge funds won't likely be over any time soon. "He noted hedge funds aren’t known for their patience in waiting for companies to grow their stock prices or profit margins," Funk reports. But many news organizations will see market turbulence as they make the transition from print to digital, Franklin told Funk.