YB new stock pitches (Wed, Apr 2)

Lee Enterprises, a media company, is likely to be acquired by billionaire David Hoffmann, who owns 10% of the company and has expressed interest in buying it outright. Sidoti's $20 price target suggests Lee's asking price, while Quint Digital (12% owner) has been buying in the $12-15 range. There's a 75% chance of a $12.50-$17.50 offer by May 2025, with a 30% upside to the $13.25 weighted average outcome. Lee's weak Q1 2025 performance, with EPS missing by $2.40 and revenue by $6M, has led to planned $40M cost cuts. A recent cybersecurity attack is expected to have a material impact on financials. CEO Kevin Mowbray stands to gain $9.9-10.8M from a sale compared to $1M without a deal. The company previously rejected a $24/share offer from Alden Global Capital in 2021, and management is under pressure to agree to a deal due to continued underperformance and declining revenues.

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Anterix (ATEX), trading at $0.35/MHz-Pop, owns 6 MHz of 900 MHz low-band spectrum leased to utilities for private LTE networks, with $390M in contracts signed. The FCC is likely to grant a 66% spectrum increase to 10 MHz. Recent catalysts include a new CEO implementing a 20% G&A cut and strategic review, a $3B pipeline with $1B likely to convert, and potential for a 5x5 ruling. The company is undervalued compared to the industry average of $1.50/MHz-Pop, with a bull case target of $140/share and a potential 35% IRR over 8 years. Risks include slow contract conversions and potential competition. The strategic review, initiated after receiving inbound interest, could lead to a take-private scenario or strategic investment. The company's largest shareholder, Owl Creek, owns 30% and supports exploring alternatives. ATEX is currently buying back shares and has $180M in contracted cash flows to be received.

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Dalata Hotel (DHG.IR), Ireland's largest independent four-star hotel operator, has announced a formal sale process, likely pushed by major shareholder Al Zahid (10% stake). The company trades at 7.5x EV/EBITDA, 9x P/FCF, and below book value despite consistent low-teens ROIC. With a market cap of €1bn and EV of €1.3bn, Dalata operates 55 hotels with 11,851 rooms across Ireland, UK, and Continental Europe. The company has shown resilience through the pandemic, reducing shareholder dilution to 14% and improving its balance sheet. A potential takeout price of €7+ per share is possible based on NAV and industry comparables. Key catalysts include interest from Al Zahid, who previously attempted to acquire shares through a ghost bidder, and another major shareholder, Eiendomsspar (9% stake). Risks include the possibility of no bids materializing and low management ownership. The market currently assigns a 23% probability of a deal occurring.

Read the full article here. Read time: 7 min