Hedge fund appeals to investors in news publisher

OMAHA, NEB. — The Alden Global Capital hedge fund is sending its own appeal to shareholders of newspaper publisher Lee Enterprises as part of its campaign to acquire the company.

The New York-based hedge fund, which is already one of the nation’s largest newspaper owners, urged Lee shareholders Thursday to support two new directors it has nominated to help reshape the Davenport,

Iowa-based company’s strategy. Lee already rejected Alden’s $24 per share offer to buy the company and asked shareholders to help it fight off Alden’s advances.

Alden is pressing ahead with its effort to reshape Lee’s board and replace the company’s Chairman Mary Junck and one other board member, even though Lee maintains that Alden didn’t meet its requirements to nominate board members. Alden sued Lee to force a vote on its nominees, and a trial on that is scheduled to begin Feb. 7 ahead of the company’s March 10 annual meeting.

Lee has said that it believes Alden’s $141 million bid “grossly undervalues” the company that owns the St. Louis Post-dispatch, the Buffalo News and dozens of other newspapers, including nearly every daily newspaper in Nebraska. Since Alden announced its bid in November, Lee’s shares have surged as high as $44.43 before falling back to close at $33.47 Thursday.

Alden says Lee shareholders should welcome its nominees because they can help the company navigate the transition to digital publishing and improve profits. But Lee officials and local media advocates have been wary because Alden has a reputation for steep cost costs and extensive layoffs at the more than 200 newspapers it owns.

Alden has said it owns 6.3% of Lee’s shares. Two other hedge funds that own large stakes in Lee have said they believe the company is worth significantly more than Alden offered.