Hedge fund Alden Global Capital has made an offer to acquire Lee Enterprises, owner of the Richmond Times-Dispatch and nine other daily newspapers in Virginia.
Alden already owns 6% of Lee’s stock. Alden sent a letter Monday to Lee’s board of directors offering to buy the rest for $24 a share, which totals around $141 million, in cash. Alden said it could complete the acquisition in four weeks.
Shares in Lee Enterprises closed Monday at $23.40, up $4.95 or 26.83%, in heavy trading on the Nasdaq Stock Market.
Lee Enterprises owns 77 daily newspapers in 26 states including the St. Louis Post-Dispatch and the Buffalo News. The company had more than 5,000 full-time employees as of September 2020.
In Virginia, Lee’s daily newspapers are The Daily Progress in Charlottesville, The Roanoke Times, Bristol Herald Courier, News & Advance in Lynchburg, Martinsville Bulletin, Danville Register & Bee, The Free Lance-Star in Fredericksburg, Culpeper Star-Exponent and The News Virginian in Waynesboro.
“We believe that as a private company and part of our successful nationwide platforms, Lee would be in a stronger position to maximize its resources and realize strategic value that enhances its operations and supports its employees in their important work serving local communities,” the Alden offer read. “Our interest in Lee is a reaffirmation of our substantial commitment to the newspaper industry.
Alden acquired Chicago-based Tribune Publishing earlier this year, which included The Chicago Tribune and the Baltimore Sun as well as The Virginian-Pilot and Daily Press in Virginia. Alden also owns other newspapers, including The Denver Post, The Mercury News, The New York Daily News, The Orange County Register and The Boston Herald.
“Our goal is to provide valued news and information to local subscribers nationwide, led by a talented team of seasoned newspaper executives who have worked in journalism for an average of more than 30 years,” the offer read.
Alden has the reputation of significantly cutting costs in newsrooms that it acquires, including selling the newspaper’s real estate and laying off a significant percentage of newsroom staff. The newspaper business has been consolidating as it struggles with a digital transition and shrinking revenues, and financial firms like Alden have taken an increasingly prominent role as owners. Newsroom jobs dropped nearly in half from 2004 to 2018, according to Pew Research, and the pandemic has exacerbated those stresses.
Lee Enterprises said its board and management team “are committed to acting in the best interests of all shareholders.” The company said in a statement late Monday that its board “will carefully review Alden’s proposal to determine the course of action that it believes is in the best interests of the company and Lee shareholders. There is no need for Lee shareholders to take any action at this time.”
Lee expanded in March 2020 when it bought billionaire Warren Buffett’s newspaper chain from Buffett’s Berkshire Hathaway. At the time, Buffett said, “We had zero interest in selling the group to anyone else for one simple reason: We believe that Lee is best positioned to manage through the industry’s challenges.”
The Associated Press contributed to this report.