At least two potential buyers made preliminary bids Friday to acquire Knight Ridder Inc., the country's second-largest newspaper chain, according to three people familiar with the discussions.
Among those submitting offers by the first-round deadline were investment firm Texas Pacific Group and an alliance of private equity investors Kohlberg Kravis Roberts & Co., Blackstone Group and Providence Equity Partners, the people said.
The level of interest increases the chances that San Jose-based Knight Ridder will change hands -- and at a higher price than the stock market has set. The rare auction of a major chain is seen as a referendum on the value of such old-media properties.
Investment bankers tracking the process said they expected at least two newspaper companies to join the bidding as well -- the country's largest chain, Gannett Co., and privately held MediaNews Group Inc.
Investors were encouraged by the early bids, although the amounts could not be learned.
Texas Pacific, founded in 1993, is one of the largest and most aggressive buyout firms, taking on underperforming and complex companies as diverse as Continental Airlines and Burger King. It also is one of the most successful, last year reporting long-term returns of more than 50 percent a year before fees.
Kohlberg Kravis Roberts is one of the pioneers of large-scale buyouts, having engineered the takeover of RJR Nabisco in 1989 for more than $25 billion.
McClatchy Co., which owns the Sacramento Bee and the Minneapolis Star Tribune, also has been exploring a bid, bankers said. Gannett, MediaNews and McClatchy declined to comment Friday, as did Knight Ridder and the reported bidders.
The first-round bidders will receive confidential information on Knight Ridder as they prepare concrete offers, a process expected to last into January. Although Friday marked the initial deadline, later offers will be considered.
