Newspaper giant Lee Enterprises, locked in a fight to stave off a hostile takeover bid from Alden Global Capital, won a major skirmish last Thursday when it re-elected its preferred board director nominees, all of whom were incumbents.
Alden has for months fought to officially nominate its own set of board members. But it’s lost twice in Delaware Chancery Court — once in a challenge to Lee’s interpretation of its bylaws that prohibited Alden nominees from being put to a vote, and more recently in a challenge to Lee’s decision to base the election on a plurality vote, which in effect assured the reelection of Lee’s nominees.
Re-elected were Lee’s three nominees: Chairman Mary E. Junck, Lead Independent Director Herb W. Moloney and Lee CEO Kevin D. Mowbray.
Based on the preliminary results, Lee said in a statement, each of its director nominees received support from more than 70% of the votes cast, with each director receiving support from more than a majority of company’s outstanding shares. The preliminary vote results also demonstrated record participation from shareholders, with more than 75% of Lee’s outstanding shares casting votes, an increase of over 20 percentage points from the company’s average turnout over the prior three years.
“The results represent a resounding rejection of Alden Global Capital’s campaign against Lee,” the statement said. “This is now the second court ruling in less than two weeks rejecting Alden’s desperate efforts to destabilize Lee. We deeply appreciate the record turnout and strong support we received from shareholders at this pivotal annual meeting.”
Alden, widely viewed as a hedge fund that strips resources from its newspaper-industry investments, already owns slightly more than 6% of Lee stock. Last year, it acquired the Tribune Co., and in November it offered Lee shareholders a cash deal for $24 per share. The Lee stock subsequently shot past that number and since then, Lee has asserted the offer is a gross undervaluation. The stock was trading around $30 on Friday morning.
Lee Enterprises, based in Davenport, Iowa, publishes daily newspapers, digital products and over 350 weekly and specialty publications serving 77 markets in 26 states.