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DAVENPORT, Iowa (AP) — The Lee Enterprises newspaper chain has adopted a “poison-pill” plan to protect itself from a hostile takeover while the company's board considers an unsolicited offer from hedge fund Alden Global Capital.
The shareholder rights plan would take effect if Alden gets control of more than 10% of Lee's stock anytime 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.
New York-based Alden said last week that it already owed more than 6% of Lee's stock when it offered to buy the rest of the shares for $24 apiece or about $141 million. The plan Lee adopted Wednesday would make it more expensive for Alden to acquire a controlling stake in the company.
Lee's Chairman Mary Junck said the so-called “poison-pill” plan will give the board and investors "the time needed to properly assess the acquisition proposal without undue pressure while also safeguarding shareholders’ opportunity to realize the long-term value of their investment in Lee.”
Lee owns the St. Louis Post-Dispatch, the Buffalo News and dozens of other newspapers including nearly every daily newspaper in Nebraska.
Alden has become one of the largest newspaper owners in the country through a series of acquisitions in recent years, including the this year's purchase of Tribune's papers. Along the way, Alden has developed a reputation for intense cost cuts and layoffs.