KNIGHT RIDDER SALE ALL ABOUT PLEASING WALL STREET
What Everyone Is Talking About Today
KNIGHT RIDDER AUCTION, TO INDUSTRY’S RELIEF, GETS BIDS
Along With Private Equity Players Are Gannett, McClatchy and MediaNews
KNIGHT RIDDER NEWSPAPER CHAIN GOES UP FOR SALE
Bowing To Shareholder Pressure, Second-Largest Chain Hires Goldman Sachs
A group of equity firms including Thomas H. Lee Partners, whose investments include American Media, and the Texas Pacific Group made a nonbinding bid of $4.7 billion in cash. The bids were reported by The New York Times.
It was unclear, however, whether a team of newspaper powerhouse Gannett and MediaNews Group submitted a bid. Officials at each company declined to comment.
Knight Ridder, which also had no comment on the bids, put itself on the block in November after its three biggest shareholders demanded a 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,” as the largest shareholder put it. The process is viewed by many as a referendum on the future of newspapers in the digital age.
A good deal for McClatchy
Edward J. Atorino, a media analyst with Benchmark & Co. in New York, said that Knight Ridder presents a lot of opportunities for McClatchy. McClatchy, armed with Knight Ridder’s 32 newspapers, would rival Tribune Co. in revenue and could blanket the West Coast, particularly Northern California, in a compelling way for advertisers, Mr. Atorino said. “It’s a much better deal for McClatchy than it would be for Gannett.”
Mr. Atorino added that he hadn’t expected McClatchy to make a powerful bid. “I didn’t think they had the wherewithal to do it,” he said.
McClatchy’s offer is equivalent to $65 a share. Knight Ridder shares closed at $62.66 yesterday, when bids were due, but was trading above that at noon today.