Hedge fund loses lawsuit in fight to buy Lee Enterprises | Wyoming News
OMAHA, Neb. — A judge cleared the way for newspaper publisher Lee Enterprises to use a voting system that will guarantee the re-election of two longtime directors at next month’s annual meeting despite objections from a trying hedge fund to buy the company.
The Davenport, Iowa-based publisher said the Delaware judge on Friday dismissed Alden Global Capital’s latest lawsuit. Earlier this month, a judge also blocked Alden’s efforts to appoint its own directors at Lee’s March 10 annual meeting.
“This is now the second court ruling in less than two weeks rejecting Alden’s desperate efforts to destabilize Lee and push his grossly undervalued proposal to buy the company,” Lee said in a statement.
Alden did not immediately comment on the decision.
The Casper Star-Tribune publisher, St. Louis Post-Dispatch, Buffalo News, Lincoln Journal Star and dozens of other newspapers rejected Alden’s $141 million takeover bid in December. The New York-based hedge fund is already one of the biggest newspaper owners in the country, but it has a reputation for imposing deep cuts and layoffs on the publications it owns.
Alden objected to Lee’s decision to use a plurality standard for director voting because it will essentially guarantee the re-election of Lee’s chairman and lead independent director. As long as the directors get at least one “yes” vote, that’s more than any other candidate could get because they’re running unopposed. Alden wanted the directors to get a majority of the votes cast to keep their seats.
Alden, which owns 6.3% of Lee’s shares, says change is needed as the company has had disappointing results since buying all of Berkshire Hathaway’s newspapers in 2020. But Lee said it is making progress well in the growth of online ad revenue and digital subscriptions.
Lee’s board received support from two other hedge funds that have stakes in the publisher, as they said Lee was worth significantly more than the $24 per share offered by Alden.
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