• by Tony Silber , Staff Writer, December 10, 2021

The saga of Alden Global Capital’s attempted hostile takeover of the newspaper chain Lee Enterprises took another turn Thursday when the board of directors unanimously rejected Alden’s offer of $24 per share, or $141 million, as one that “grossly undervalues” the company.

“The Alden proposal fails to recognize the strength of our business today, as the fastest-growing digital-subscription platform in local media, and our compelling future prospects,” Lee Chairwoman Mary Junck said in a statement. “We remain confident in our ability to create significant value as an independent company and are focused on our Three Pillar Digital Growth Strategy, detailed earlier this year. We have demonstrated accelerating momentum across our platforms as we execute our plan.”

And it has.

The company, in a separate press release issued Thursday, Lee reported strong fourth-quarter fiscal 2021 results. Revenue grew for the second straight quarter, reaching $193.9 million, with the revenue performance driven by 71% growth in Amplified, a full-service digital marketing services agency; 28% growth in digital-only subscription revenue; and 8% revenue growth at TownNews, an SaaS content platform. Total digital revenue increased by 37% in the fourth quarter and now represents 34% of our total operating revenue.

In addition, CEO Kevin Mowbray stated almost 55% of total revenue, representing $106 million, is recurring subscription-based revenue. Digital-only subscribers grew 65% compared to last year and 19% sequentially over the third quarter, and digital-only subscribers now total 402,000.

Lee will continue a steadfast commitment to high-quality local news deeply valued in the communities we serve, Junck added. “With a nimble, digital-first mind-set, we are leveraging our brands and attractive market position, solid balance sheet, established digital infrastructure and digital marketing expertise, and talented team to drive recurring revenue growth and strong cash flow performance.”

Lee owns 75 daily newspapers and over 350 weekly and specialty publications serving 77 markets in 26 states. Its markets include St. Louis; Buffalo, New York; Omaha, Nebraska; Richmond, Virginia; Lincoln, Nebraska; Madison, Wisconsin; Tucson, Arizona; and Davenport, Iowa, where it is based.

But having watched the twists and turns of newspaper-industry M&A, especially with Alden, it’s possible to read the Lee Board’s statement as a mere negotiating position. The Alden proposal grossly undervalues Lee and is not in the best interests of the company and its shareholders, the statement said. Put another way, though, it seems to be saying: "We’re performing like gangbusters. Make a better offer and we can talk."