Lee rejects Alden’s takeover offer

Newspaper publisher Lee Enterprises has rejected a takeover offer from the Alden Global Capital hedge fund that is one of the largest newspaper owners in the country with a reputation for intense cost cuts and layoffs, but the fight over the company’s future is likely far from over.

Lee said Thursday that its board unanimously rejected Alden’s offer to buy the company for $24 per share or about $141 million because it isn’t in the best interests of shareholders. Also Thursday, Lee reported a $5.3 million fiscal fourth-quarter profit this year, rebounding from a $1.3 million loss a year ago, as the number of digital-only subscribers at the company grew 65% to 402,000.

“The Alden proposal grossly undervalues Lee and fails to recognize the strength of our business today, as the fastest-growing digital subscription platform in local media, and our compelling future prospects,” Lee Chairman Mary Junck said.

But Ken Doctor, a media analyst who runs a local online journalism startup called Lookout Santa Cruz in California, said Alden isn’t likely to abandon its bid to acquire Lee because it believes it can extract profits from the company with the model it has used elsewhere that calls for selling off the real estate the chain owns and drastically cutting costs.

Lee owns the St. Louis Post-dispatch, the Buffalo News and dozens of other newspapers.

Alden has scooped up newspapers across the country through a series of acquisitions in recent years, including the purchase of Tribune Publishing’s papers earlier this year. Alden also owns the Denver Post, Orange County Register and Boston Herald.

Lee’s stock gained 11% Thursday to close at $27.70.