Publisher extends 'poison pill' in response to courtship from Naples firm

Iowa newspaper group Lee Enterprises is extending its shareholder rights plan, known as a poison pill, following what it calls repeated acquisition interest from a Naples conglomerate. 

Lee, in a Wednesday statement, says the rights plan is in response to several Hoffmann announcements from the Hoffmann Family of Cos. including: 

• Within the past year, Hoffmann has accumulated an ownership stake of approximately 9.8% of Lee’s outstanding common stock 
• Since October 2024, Hoffmann has issued multiple press releases highlighting its growing ownership position in Lee, its intention to become Lee’s largest shareholder and its interest in acquiring Lee outright.
• On March 20 Hoffmann sent a letter to Lee seeking to open discussions regarding a potential acquisition of Lee but did not specify an acquisition price or any other material terms, and the same day, Hoffmann made its expression of interest public.

In the March 20 letter, addressed to Lee President Kevin Mowbray and the firm’s board of directors, Hoffmann 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.”

Davenport, Iowa-based Lee Enterprises owns The St. Louis Post-Dispatch, The Richmond Times-Dispatch and the Buffalo News, among other publications. It publishes more than 350 weekly and specialty publications in 72 markets across 25 states. 

Lee responded to Hoffmann’s letter by offering to enter into a confidentiality agreement to “share certain confidential information that would allow Hoffmann to make a proposal with a price and outline its ability to finance a possible transaction.”

David Hoffmann has garnered national attention for his positive outlook on the newspaper industry. 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.

Lee Enterprises, meanwhile, has been in this situation before. 

It initially adopted the shareholder rights plan in March 2024, officials say, “in response to a significant accumulation of shares of Lee common stock by a shareholder that controlled a digital publishing business that sought to compete with the company’s subsidiary, BLOX Digital.”

In addition, Lee approved a shareholder rights plan in November 2021, according to a report in MarketWatch, that “would prevent hedge fund Alden Global Capital LLC from acquiring more than 10% of the company." Alden, known for buying newspapers and then instituting cost-cutting plans, offered to buy Lee for $141 million.

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.

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.