LEE ENTERPRISES, Inc 8-K

What Happened

• Lee Enterprises announced a stock purchase agreement dated December 30, 2025, to sell 15,384,615 shares at $3.25 per share in a private placement expected to raise approximately $50.0 million (gross). The deal is led by anchor investor David Hoffmann and other investors and is expected to close in Q1 2026 after stockholder approval and other closing conditions. Concurrently, CEO Kevin Mowbray agreed to voluntarily retire effective immediately prior to the Closing; Nathan Bekke (current COO) is expected to become Interim CEO.

Key Details

• Private Placement: 15,384,615 shares at $3.25/share; ~ $50.0M gross proceeds; net proceeds for working capital and general corporate purposes.
• Stockholder vote & charter change: Special meeting to be held to approve issuance (Nasdaq Listing Rule waivers) and to amend charter to increase authorized shares from 12,000,000 to 40,000,000.
• Board & governance: Board size to increase from 9 to 10 at Closing; Anchor Investor to designate one director (expected to be David Hoffmann) and to serve as Chair; one additional mutually agreeable director to be appointed.
• Investor protections: Investors agree to a 180‑day lock-up and 12‑month standstill (with limited exceptions allowing certain investors to buy up to 600,000 shares during the standstill); voting agreements executed to support the transaction proposals.
• CEO transition pay & terms: Kevin Mowbray to receive $1.5M severance payable over 36 installments, 18 months COBRA coverage for him and spouse, transition consulting through May 31, 2026, and standard indemnification/non-compete/non-solicit terms.
• Credit amendment tied to Closing: Upon receipt of proceeds, the term loan margin is reduced from 9.00% to 5.00% for five years (estimated interest savings ~ $18M/year, up to ~$90M over five years); definitions of Change of Control and Excess Cash Flow are amended (cash-on-hand threshold set at $64.0M).
• Closing conditions and limits: Closing subject to stockholder approval, effectiveness of charter amendment, Nasdaq listing approval, execution of registration rights agreement, credit amendment effectiveness and other customary conditions; deal may be terminated in specified circumstances (latest outside date April 30, 2026).

Why It Matters

• This transaction provides Lee Enterprises with an immediate source of capital (~$50M gross) for working capital and operations, while tying significant governance and financing changes to the financing. Investors should note the pending stockholder vote to authorize the share issuance and charter increase, the potential change in board control dynamics (Anchor Investor director and Chair), and the substantial interest savings for the company if the Credit Agreement Amendment becomes effective at Closing. The CEO retirement and leadership transition are material corporate changes disclosed alongside the financing.