DAVENPORT, Iowa – The Lee newspaper chain, which owns dailies in LaCrosse, Winona and 75 other mostly Midwest cities, reacted quickly and negatively to a hostile takeover attempt by a New York hedge fund. Lee’s board of directors took the costly step of giving shareholders a 50% discount to buy more shares. The vote was unanimous. The upside for Lee is to prevent the hedge fund, Alden Capital, from taking over by making it costlier to acquire shares. The downside for Lee: The value of Lee stock could be drop through the floor. This anti-takeover tactic is not called “a poison pill” without reason. Alden already owns 5.9% of Lee, which is short of a controlling interest. Lee’s poison pill would be available to shareholders if and when Alden’s offer of $24 a share reaches a threshold of 10% ownership.
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Lee directors pointed to “Alden’s track record of rapidly acquiring substantial control or ‘negative control’ positions in other public companies.” Lee directors also accused Alden of “seemingly inconsistent disclosures” on government-required forms regarding its ownership of Lee shares.
Lee Enterprises corporate headquarters. In Davenport.