David Hoffmann, the Florida-based billionaire and Washington, Missouri native, is leading a $50 million deal with the owner of the Wisconsin State Journal and newspapers in Baraboo, Portage and Beaver Dam to buy a controlling stake in the chain and become its chairman.
A story in the Jan. 15 issue of several of the newspapers covered the sale. According to the story:
The deal announced Tuesday, Jan. 13, shakes up leadership and offers debt relief for regional newspaper owner Lee Enterprises, which has recorded heavy losses amid the industry’s struggles to retain subscribers and advertisers as news outlets shift from print to digital.
As part of the deal, Lee CEO Kevin Mowbray is resigning with a $1.5 million payout. Chief Operating Officer Nathan Bekke will take over as interim CEO.
Lee’s primary lender, Berkshire Hathaway Finance, has agreed to cut the interest rate for five years on the newspaper chain’s roughly $450 million in debt from 9% to 5%, saving as much as $18 million a year in interest payments.
“This transaction reflects the board’s determination to act decisively,”Mary Junck, who for years has been the chair of Lee’s board, said in a statement. “By strengthening the balance sheet and improving the company’s capital structure, we are putting the company in a better position to execute and create long-term value.”
Lee Enterprises, the Davenport, Iowa, owner of the State Journal and newspapers and other publications in 70 markets, announced it had reached an agreement with Hoffmann and other investors to sell them nearly 15.4 million shares at $3.25 per share.
The deal would make Hoffmann the lead investor and is expected to make him chairman of the board, Lee said in a security filing.
Hoffmann has committed to buying up to $35 million in shares, while other investors committed up to $15 million. Lee said it will hold a shareholder meeting to obtain approval for the both the deal and get authorization to increase the number of the number of shares it can issue to 40 million from 12 million. The deal is expected to close in the first quarter of 2026.
Hoffmann has for more than a year expressed an interest in Lee and local news. Lee initially rebuffed his offers, inserting a poison pill to keep investors like him from gaining control of the company as Hoffmann grew his stake in the company to around 10%.
But Lee found itself without other options after it abruptly cancelled a shareholder meeting this month to issue additional stock to raise capital.
Hoffmann, who founded the Hoffmann Family of Companies, which owns commercial real estate and businesses. The company made headlines buying properties and businesses in Missouri wine country and elsewhere in the state. This month, the company announced the purchase of the NHL’s Pittsburgh Penguins.
