The owner of the Richmond Times-Dispatch and nine other daily newspapers in Virginia on Friday rejected a prospective buyer’s attempt to nominate three new board members next year, citing procedural flaws in its filing.
Davenport, Iowa-based Lee Enterprises said New York hedge fund Alden Global Capital’s mistakes included making the nominations through a third-party affiliate that did not own Lee shares. “Alden failed to meet the most basic and most important requirement of our director nomination procedure,” the company said in a news release.
Lee also noted that the deadline for 2022 board nominations has since passed, so Alden cannot try again. A representative for Alden did not immediately respond to a request for comment.
The rejection marks another setback for Alden, which is looking to make Lee the latest in a series of acquisitions intended to consolidate the newspaper industry.
Alden appeared hopeful for a speedy takeover after making its $141 million, or $24 per share, offer for Lee on Nov. 22. It noted that figure represented about a 30% premium over the previous day’s market close, and said that, with Lee’s cooperation, it could have things wrapped up in “approximately four weeks.”
Shares in Lee closed at $25.30, up $1.29 or 5.37%, on Friday.
Lee’s board unanimously voted last week to enact a “poison pill” plan that could dilute shares if Alden starts buying without its consent. And newsroom unions have begun a campaign against the acquisition, noting Alden’s reputation for steep cost-cuts in the name of efficiency.
“They will take this proud company, built over decades of hard work, and leave it in ashes,” the unions wrote in a joint letter to Lee’s board.
The company has pledged a “careful review” of Alden’s offer to determine the best move for itself and shareholders.
Lee owns 77 daily newspapers in 26 states including the St. Louis Post-Dispatch, the Buffalo News and the Omaha World-Herald and the Tulsa World. The company had more than 5,000 full-time employees as of September 2020.
In addition to The Times-Dispatch, Lee’s daily newspapers in Virginia 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.