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News Herald owner adopts 'poison pill' as it weighs Alden offer
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News Herald owner adopts 'poison pill' as it weighs Alden offer

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News Herald print editions

A stack of copies of The News Herald sit on a desk in the newsroom.

The owner of The News Herald along with newspapers in 26 states said Wednesday it had approved what’s known as a “poison pill” plan to guard against a hostile takeover as it considers New York hedge fund Alden Global Capital’s unsolicited offer to buy it.

Davenport, Iowa-based Lee Enterprises’ plan 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 it owns 6.1% of Lee.

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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.

Lee owns dozens of papers in addition to The News Herald, including the Hickory Daily Record, McDowell News, Statesville Record & Landmark, Winston-Salem Journal and Greensboro News & Record. It also owns properties across the mid-west, like the St. Louis Post-Dispatch, Omaha World-Herald and Tulsa World.

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

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