Shareholders for Post-Dispatch owner reject hedge fund's effort to shake up its board
The owner of several large newspapers in the Midwest on Thursday rebuffed the latest attempt at a takeover by a hedge fund known for gutting the news outlets it buys.
Lee Enterprises shareholders voted to re-elect three board of director nominees at its annual shareholder meeting. That fended off a campaign by Alden Global Capital that aimed to unseat the incumbent directors after a judge denied its request to put forth its own board of director nominees.
In a statement, Lee said shareholders re-elected chairman Mary Junck, chief executive Kevin Mowbray and lead independent director Herbert Moloney with each getting more than 70% votes cast in their favor.
Iowa-based Lee Enterprises owns the St. Louis Post-Dispatch and 23 other Midwest newspapers. In November, Lee rebuffed a $141 million bid from Alden, a hedge fund with a reputation for saddling its newspapers with debt, aggressively cutting costs and downsizing newsroom payrolls.
Alden Global Capital did not immediately respond to a request for comment on the shareholders’ vote.
Jeff Gordon, president of the union that represents staffers at the St. Louis Post-Dispatch, said the union's members voted their combined 300 shares to re-elect Lee’s nominees.
“Normally the guild would be skirmishing with the board over issues,” Gordon said. “But in this case — given the fact that Alden was making a hostile takeover attempt and does not commit to journalism to the level Lee has — we actually voted our shares in favor of the existing board.”
Gordon and the other news unions under Lee urged the company to continue fending off Alden’s proposition for a sale. Gordon said while Lee isn’t the best steward of its newspapers, an Alden alternative could spell doom for Midwest newspapers.
“We will continue to stress the need to invest in journalism,” Gordon said.
“But as we always tell Lee, they’re less terrible than the alternative — the half-hearted compliment we often give Lee.”Jeff Gordon, union president
Last month, Lee Enterprises laid off two top editors at the Omaha World-Herald, garnering criticism from journalists and the Omaha community.
Harris Kupperman is president of Praetorian Capital and the company’s second-largest shareholder with 7.3% of Lee’s shares. He has been critical of Alden’s takeover attempt, calling the offer “insufficient and opportunistic.”
On Thursday, he applauded shareholders for re-electing Junck, Mowbray and Moloney.
“I think it shows that shareholders think the current path is a good path. They could always do a better job but for right now shareholders like the path they’re on,” Kupperman said. “I think they’re doing the right thing by transitioning to digital. Digital is the future and they need to go faster.”
Kupperman said he was disappointed to see Lee Enterprises spend money fighting Alden’s “vote no” campaign.
“That’s money that should be reinvested in the business, not in lawyers,” Kupperman said.
Gordon said he expects Alden will continue pressuring Lee for a sale.
“I don’t think Alden is going anywhere,” Gordon said. “It will be interesting to see at what point Alden attempts to make a different offer and everybody will be keeping on the stock as well which has come down some but is still considerably higher than what Alden offered.”