Naples’ Hoffmann takes step to buy national newspaper chain

The Hoffmann Family of Cos. has reached out to the Iowa newspaper group Lee Enterprises in hopes of beginning negotiations on purchasing the company and possibly taking it private.

In a March 20 letter addressed to Lee’s president, Kevin Mowbray, and the board of directors, Hoffmann’s chairman David Hoffman writes that he wants “to open discussions with you regarding a potential combination of our companies, in which the HF Companies would pursue acquisition of Lee in its entirety.”

Hoffmann, based in Naples and Chicago, is Lee’s second largest shareholder owning a 9.7% of the company's shares as of late last year.

A Lee spokesperson says it received the letter and says that “should Hoffmann come forward with a specific offer, the company will evaluate and respond.”

“Lee’s board of directors and management team are committed to acting in the best interests of all shareholders,” the spokesperson says in an email statement Monday. 

“Consistent with its fiduciary duties, Lee’s board of directors will carefully review any credible proposal to determine the course of action that it believes is in the best interests of the company and Lee shareholders.”

Lee Enterprises owns The St. Louis Post-Dispatch, The Richmond Times-Dispatch and the Buffalo News, among other publication, including 350 weekly and specialty publications.

David Hoffman told the Business Observer last year that his company began buying into Lee in late September and mid-October with around a $12 million to $13 million investment in a series of stock purchases. It announced in December that it had taken an even larger stake.

At the time Hoffmann said the intention was to become Lee’s largest shareholder.

Since 2022 the Hoffmann Media Group has bought 14 media companies covering 30 markets including in Michigan, California and Florida. And in November it bought a 5% share of DallasNews Corp., the parent of The Dallas Morning News.

It also has strong ties to St. Louis, where Lee owns the St. Louis Post-Dispatch

In the letter to Mowbray and the board of directors, Hoffmann reiterates the company’s commitment to Lee and the industry writing that “we remain unwavering in our support of journalism and local newspapers, in both print and digital formats.”

“It is our stated goal to leverage our ownership position in Lee, along with our ownership of multiple other media brands, to support and grow local news outlets,” he writes.

Hoffmann adds later that, “We believe this commitment represents a sharp contrast to other potential acquirers such as non-local hedge funds and investment firms primarily concerned with increasing profits over jobs, local concerns and the power of quality journalism,” Hoffmann writes.

Hoffmann with all his support for local newspapers is realistic about the modern world of media where more readers are consuming newspapers digitally than in print. And that’s important, he says.

In Lee’s first quarter earnings report issued Feb. 6, the company says its total digital revenue increased 5% to $73 million for the quarter. Its digital advertising revenue was up 1% for the three months ending Dec. 29, but its print revenue was down 19%.

Lee’s total operating revenue for the quarter was $145 million.

Hoffmann, in the letter, writes that with the rise in digital revenue and decline in print revenue, “we believe deft management and navigation of this transition to be essential to Lee’s future viability.”

And, he writes that the “potential transformation to a private company” will significantly reduce the costs of being a public company enabling Lee’s management team to focus on operations, growth and profitability.

“The HF Companies are well-positioned financially, in both resources and sophistication, to complete an acquisition,” Hoffmann writes.

“We are major shareholder who has closely watched the company for some time and has actively engaged with its board and management and have extensive experience in the media industry. Accordingly, we anticipate an expedited due diligence process that will allow the transaction to close quickly.”

The Hoffmann Family of Cos. first came to Naples in 2015 when it bought a $75 million portfolio that included seven properties and a parking lot.

Today, it owns more than 100 national brands and employs 9,000 employees with businesses located in 30 countries.