DAVENPORT, Iowa (AP & KMTV) — The Lee Enterprises newspaper chain — owner of the Omaha-World Herald, Council Bluffs Nonpareil, Bellevue Leader and several other newspapers — has adopted a "poison-pill" plan to protect itself from a hostile takeover while it considers an unsolicited offer from hedge fund Alden Global Capital to buy Lee for $24 a share.
The plan would take effect if Alden gains control of more than 10% of Lee's stock in the next year. The Davenport, Iowa-based company said the plan would allow its other shareholders to buy shares at a 50% discount at that point or possibly get free shares for every share they already own. Lee owns 12 newspapers in Nebraska and 10 in Iowa, in addition to dozens of newspapers in other states.
According to a report from the nonprofit Poynter Institute,"The hedge fund has developed a reputation for slashing staff in newsrooms and other departments and selling off real estate at outlets it owns. It announced cuts at Tribune as soon as the deal closed. Besides investing little in news, it lags the industry in technology upgrades."
Alden said last week that it already owed more than 6% of Lee's stock. The plan Lee adopted Wednesday would make it more expensive for Alden to acquire a controlling stake.
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