Florida billionaire leads $50 million investment in Lee Enterprises; new CEO and chairman of the board part of the deal

Florida billionaire David Hoffmann will be the new chairman of the board of Lee Enterprises, Inc. after leading a $50-million investment in the struggling media company headquartered in Davenport.

As a result of the planned private equity deal announced Tuesday (12/30), Lee's long-time President and Chief Executive Officer Kevin Mowbray will retire and receive $1.5 million as part of his severance package. Mary Junck also will step aside as chairman of the board. It was unclear if she will remain on the Lee board.

Nathan Bekke, the company’s current chief operating officer, would become Interim chief executive officer, according to the company news release.

Lee, owner of the Quad City Times and Dispatch/Argus and some 70 other newspapers and online news sites, had been trying in recent months to raise additional capital through a "rights purchase" offering.

By raising additional capital, the media company hopes to lower the interest rate on its $455-million debt to 5 percent from the current 9 percent annual interest. The interest rate reduction would lower Lee's debt payments by some $90 million over the five-year agreement with BH Finance, a subsidiary of Warren Buffett's Berkshire Hathaway.

Hoffmann is founder of DHR Global, and his businesses include Oberweis Dairy and Mitch’s Cookies. Last month, one of his companies acquired a controlling interest in the Pittsburgh Penguins.

CLICK HERE to download a copy of the Lee news release about the equity investment and change in Lee management.