Nation & World

BlackRock buys 5.5 percent stake in Lee Enterprises

It's the third large buy of Davenport media company stock

The Lee Enterprises headquarters building is shown in downtown Davenport. On Friday, it was disclosed BlackRock Inc. has
The Lee Enterprises headquarters building is shown in downtown Davenport. On Friday, it was disclosed BlackRock Inc. has bought a 5.5 percent share in the media company, joining two other large investment firms in buying signficant stakes in Lee in recent weeks. (Lee Enterprises)

DAVENPORT — BlackRock Inc. has bought about 3.1 million shares of Lee Enterprises stock, for a 5.5 percent share of the Davenport-based company.

BlackRock, based in New York City, is the world’s largest asset manager, and Lee Enterprises is the parent company of the Quad-City Times, Dispatch-Argus and Muscatine Journal in Iowa, the St. Louis Post-Dispatch and the Arizona Daily Star.

In late January, Lee announced the acquisition of 30 daily newspapers and other publications from Berkshire Hathaway Media Group.

The BlackRock purchase was disclosed in a filing with the Securities Exchange Commission on Friday, the day after Lee posted its first-quarter earnings.

The purchase is the third large buy of Lee stock in recent months.

Franklin Mutual Advisers bought about 4.35 million shares, or 7.4 percent of the company’s available stock, on Dec. 31, according to an SEC filing dated Jan. 23.

MNG Enterprises, the business name for Alden Global Capital, bought 3.4 million shares, for 5.9 percent of the company’s available stock, on Jan. 29, the same day Lee announced its Berkshire Hathaway acquisition.

Alden also recently increased its ownership stake in Tribune newspapers, and through its majority ownership of Digital First Media, owns more than 50 daily newspapers.

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MNG Enterprises wrote in its SEC filing that it intends to “engage in discussions with management and/or the (Lee’s) Board of Directors about certain operational and strategic matters, including, but not limited to, the recently announced acquisition of Berkshire Hathaway’s newspaper operations and matters pertaining to” Lee’s annual meeting later this month.

Combined, the three entities own 18.8 percent of Lee’s shares, which closed at $1.91 Friday.

On Thursday, Lee reported revenue of $122.3 million for the first quarter, compared to $136.2 million the first quarter of last year.

Lee had digital revenue of $37.2 million in the first quarter, an increase of 5.1 percent from last year’s first quarter. Digital revenue now represents 39.5 percent of Lee’s advertising revenue, the company reported, with digital-only subscriptions at 105,000.

Kevin Mowbray, Lee’s president and CEO, said in a news release that while progress was made in digital operations, there is “continued weakness in print subscriptions.”

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