Lee Enterprises announced it has entered into a definitive stock purchase agreement for a $50 million strategic equity investment in its common stock, a transaction the company framed as a board-directed effort to strengthen its balance sheet, improve its capital structure, and reset leadership and governance as it moves into what it called its next phase.
The private placement is priced at $3.25 per share, implying the issuance of roughly 15.4 million shares, subject to customary closing conditions and required approvals. The investment is led by David Hoffmann, with participation from other existing investors, and is designed to provide the company with committed capital while also underpinning amendments to its debt arrangements that management expects will materially improve cash flow.
Under the terms described by the company, Hoffmann anchored and fully backstopped the raise. He initially committed to invest at least $20 million, with the remaining $30 million intended for other top existing investors. Based on subscription levels at signing and the backstop structure, Lee said Hoffmann’s commitment was approximately $35 million, while other investors had committed roughly $15 million. Hoffmann also agreed to purchase any remaining amount not taken up by additional investors at closing, ensuring the company expects to receive the full $50 million in gross proceeds, before transaction expenses, assuming closing conditions are met.
A central element of the announcement was the linkage between the equity raise and a planned amendment to Lee’s existing credit facility. The company said the closing of the investment is expected to satisfy a condition to amend the facility, lowering the annual interest rate on approximately $455.5 million of outstanding long-term debt to 5% from 9% for five years. If implemented as described, the change would represent a substantial reduction in borrowing costs and is positioned by the company as a key step toward stabilizing its capital structure.
Lee also emphasized that the transaction followed a comprehensive review by the company’s board of directors of its performance, leverage, and long-term opportunities. The board said it concluded “decisive action” was necessary, citing the need to strengthen the balance sheet, implement leadership change, and advance a clear strategic direction to improve execution and support long-term value creation.
Governance changes are expected to accompany the investment. As part of the closing, Hoffmann is expected to assume the role of board chair, succeeding current chair Mary Junck. The company presented the transition as part of a broader effort to pair new capital with an updated governance framework intended to focus management on disciplined execution.
The company also announced a leadership transition at the executive level. Kevin Mowbray, Lee’s president and chief executive officer, has announced his retirement, ending a 39-year career with the company that began in 1986 and included roles across multiple Lee markets. Lee said its current chief operating officer, Nathan Bekke, is expected to serve as interim CEO while the board initiates a search for a permanent chief executive.
The company said the issuance and sale of shares are subject to customary closing conditions, including stockholder approval at a special meeting expected to be held in the first quarter of 2026. Until that vote and the satisfaction of other conditions, the financing, the anticipated credit facility amendment, and the board chair transition remain pending.
Advisors on the transaction include Oppenheimer & Co. Inc. as exclusive financial advisor to Lee, with Kirkland & Ellis LLP and Lane & Waterman LLP serving as legal advisors. Hoffmann is being advised by Stifel as financial advisor and Lathrop GPM LLP as legal advisor.
KEY QUOTES
“This transaction reflects the Board’s determination to act decisively. 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.”
Mary Junck, Chair Of The Board, Lee Enterprises
“This transaction strengthens the company’s balance sheet and reflects the Board’s determination to take decisive action. With improved financial stability and a clear governance framework in place, the focus can now be on disciplined execution and long-term value creation.”
David Hoffmann, Incoming Chair Of The Board
