Remember earlier this year, when I wrote incessantly about the (eventually) successful effort by the hedge fund Alden Global Capital to buy the newspapers owned by Tribune Publishing? I was interested in large part because I also was tracking what was looking like an effort by Alden to scoop up Lee Enterprises, the owner of the Gazette-Times and the Democrat-Herald.
Despite Alden’s best efforts to remain secretive, the company has picked up some nasty publicity this year, most notably this remarkable story in The Atlantic by McKay Coppins. Suffice it to say that Alden Global has a well-earned reputation as “the news industry’s ever-more-engorged leech, a cost-cutting omnivore that makes every newsroom it touches worse,” in the words of Joshua Benton of Harvard University’s Neiman Lab, which studies the future of journalism.
In any event, Alden’s interest in Lee Enterprises appeared to wane in the wake of the Tribune Publishing acquisition, which has gone about as you might have predicted, with big staff reductions among some of the nation’s best papers, including the Chicago Tribune.
But it was inevitable that Alden would come calling again — in part because, as Benton reports in this story, Lee, with 90 daily newspapers, is one of the few remaining publicly traded acquisition targets in the newspaper business.
And so it happened on Monday, when Alden sent this letter to Lee, offering to buy the company for $24 a share in cash. (You can read more about the offer in this Wall Street Journal story.) The deal is worth about $141 million.
When Alden tried to buy Gannett a few years back, the company successfully resisted — although that paved the way for a deal in which GateHouse essentially absorbed Gannett. (Both the Statesman Journal in Salem and the Register-Guard in Eugene are owned by Gannett-GateHouse, which now is known simply as Gannett.) Editors and reporters at Tribune Publishing led a spirited, but unsuccessful, effort to resist Alden. But neither Benton at the Neiman Lab nor the experts quoted by the Journal expect Lee to put up much of a fight. (The company said only that it had received the offer and was reviewing it.) And this could be over in a hurry — Alden says in the letter that it thinks it could wrap up the deal in four weeks.
So, two quick takeaways: First, if you think the Gazette-Times and Democrat-Herald are running pretty lean this days, you’re right — but you haven’t seen anything once Alden gets its hooks into these papers. Second, Lee stock bumped right up when this news broke, closing at $23.40 on Monday. I sold the last of my Lee stock a few months ago, adding a personal financial insult to the cost our communities will pay if this deal goes through.
And this final note: Lee also was in the news this weekend, when the Wall Street Journal reported that Iranian hackers broke into Lee’s servers last year to test how to create false news content. If only this Alden story were fake news.