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Lee Enterprises approves 'poison pill' in face of buyout offer

Lee Enterprises approves 'poison pill' in face of buyout offer

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Lee Enterprises said Wednesday that it had approved what’s known as a “poison pill” to guard against a hostile takeover as it considers New York hedge fund Alden Global Capital’s unsolicited purchase offer.

Lee Enterprises owns the Omaha World-Herald and the Lincoln Journal Star, as well as numerous other Nebraska dailies, including in Grand Island, North Platte, Kearney and Scottsbluff.

The plan approved by Lee Enterprises’ board would kick in if Alden gets control of 10% or more of Lee’s stock in the next year. At that point, other shareholders could buy shares at a 50% discount or get free shares for every share they already own.

Flooding the market with additional shares would dilute the stock, making it more expensive for Alden to acquire a controlling stake. Alden said in a filing Tuesday that it owns 6.1% of Lee.

The plan approved by the board is limited to one year and will expire Nov. 23, 2022. However, the board has the option of terminating it earlier.

Lee Chairman Mary Junck said the plan would give the board and shareholders time to consider Alden’s proposal “without undue pressure while also safeguarding shareholders’ opportunity to realize the long-term value of their investment.”

Alden, which has become one of the country’s largest newspaper publishers through a series of acquisitions in recent years, offered Monday to buy Lee for $141 million, or $24 per share. That was 30% higher than its value at market close Friday.

Shares closed up 20 cents or less than 1% at $24.43 on Wednesday. They rose another 32 cents after-market, following Lee’s announcement.

Based in Davenport, Iowa, Lee Enterprises owns dozens of newspapers including the St. Louis Post-Dispatch, the Arizona Daily Star and the Richmond Times-Dispatch.

Alden’s titles include the Chicago Tribune and the Baltimore Sun, which it acquired this summer in its takeover of Tribune Publishing.

World-Herald Staff Writer Nancy Gaarder contributed to this report.

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