Wednesday, December 8, 2021

Post-Dispatch Owner Takes Poison Pill As She Weighs Alden’s Proposal

The Post-Dispatch owner said Wednesday that it has approved a so-called “poison pill” plan to defend against a hostile takeover as it is considering a voluntary offer from New York hedge fund Alden Global Capital to buy it.

Lee Enterprises’ plan from Davenport, Iowa will go into effect if Alden gains control of 10% or more of Lee’s shares next year. At this point, other shareholders can buy shares at a 50% discount or receive shares for free for every share they already own. The flooding of the market with additional shares will dilute the shares, and the acquisition of a controlling stake will become more expensive for Alden. Alden said on Tuesday he owns 6.1% of Lee.

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Chairman Lee Mary Junk said the plan would give the board and shareholders time to consider Alden’s proposal “without undue pressure, and also give shareholders the opportunity to realize the long-term value of their investments.” Alden, who has become one of the nation’s largest newspaper publishers through a series of acquisitions in recent years, offered to buy Lee on Monday for $ 141 million, or $ 24 a share. This was 30% higher than its value at the close of the market on Friday.

Shares closed up 20 cents, or less than 1%, at $ 24.43 on Wednesday. Following Lee’s announcement, they gained another 32 cents after entering the market.

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