|Knight Ridder chairman-CEO Anthony Ridder now oversees a newspaper chain that is putting itself up for sale as circulation continues to decline.
Merrill Lynch Analyst Lauren Rich Fine told Advertising Age that Gannett and Tribune seemed to be the only potential contenders to buy all of Knight Ridder. Tribune could be hampered by its own stock-price worries as well as a tax liability estimated at about $1 billion, she said.
Though Gannett has recently seemed more interested in online and niche media acquisitions, it has established a track record of looking at potential transactions, Ms. Fine said. “If they can get it at a price that makes sense, they might go for it.”
The decision comes after a contentious week and a half for the company, the publisher of marquee properties like The Miami Herald and The Philadelphia Inquirer. The turmoil began in earnest Nov. 1, when the largest shareholder, Private Capital Management, publicly urged the company’s sale because of “limited growth across the newspaper industry,” “continuing consolidation among the traditional sources of print advertising revenue and “the redirection of advertising dollars to other media.” The next two largest shareholders quickly said they agreed.
At first, Knight Ridder only said that it is “always interested” in the views of its stockholders and promised a response. On Nov. 10, Private Capital filed a notice with the Securities and Exchange Commission warning that it might nominate new directors at Knight Ridder’s next annual meeting, scheduled for April 18, “in light of the company’s limited response.”
Since Private Capital’s original salvo, analysts have wondered aloud whether potential buyers even exist. Newspapers reported their latest circulation figures on Nov. 7, showing yet another loss of paying readers.
In Knight Ridder’s statement this morning, the company said there was no assurance that any transaction would result. “The company does not intend to disclose developments with respect to the exploration of strategic alternatives unless and until its board of directors has approved a specific transaction,” the company said.