SAN JOSE, Calif. -- With at least two bids on the table, Knight Ridder's board of directors is scheduled to meet tomorrow in New York to weigh offers in the possible sale of the newspaper company.
A source familiar with the company said yesterday that the situation is "still fluid."
Knight Ridder, the nation's second-largest newspaper company and owner of the San Jose Mercury News, The Philadelphia Inquirer and The Miami Herald, offered itself for sale under pressure from its three largest shareholders who were unhappy with its stock performance.
The company has received bids from a smaller newspaper chain, McClatchy Co., of Sacramento, Calif., owner of The Sacramento Bee. It will also consider an offer from a private equity consortium of Texas Pacific Group, Thomas H. Lee Partners, Hellman & Friedman, Bain Capital and Oak Hill Capital Management.
The McClatchy offer is for cash and some stock, while the private equity consortium is making an all-cash offer.
A third bid is expected from MediaNews Group Inc. of Denver, but it was not known whether one has been submitted.
It would be surprising if MediaNews did not bid. Its owner, Richard D. "Dean" Singleton, has put considerable energy into the sale, visiting the Mercury News and the Inquirer, and two other Knight Ridder papers.
MediaNews is teamed with private equity firms Madison Dearborn Partners, Onex and Vestar Partners. The company has negotiated with Gannett Co. Inc. on possibly teaming up for an offer, sources say.
Gannett, the nation's largest newspaper company, and MediaNews had no comment. Neither did Knight Ridder spokesman Polk Laffoon.
Knight Ridder has said that a sale is only one option. But a number of sources close to the process said the company would be compelled to sell at $65 a share or more. One published report has pegged McClatchy's offer at something higher.
Knight Ridder's stock closed at $65 yesterday, up from $62.66 Thursday. McClatchy closed up at $53.24, low for a company that was trading at more than $65 a share six months ago.
McClatchy, with $1.2 billion in revenue last year, is considerably smaller than Knight Ridder, which had $3 billion in revenue. But its relatively low stock price could make its offer of cash and stock more attractive, because its stock has plenty of room to rise, analysts say. In such a deal, Knight Ridder shareholders would get a mix of cash and McClatchy stock.
Knight Ridder shareholders would have to approve any deal.