Knight Ridder will begin meeting with potential buyers next week in the next step of offering itself for sale under pressure from unhappy shareholders.
The presentations for potential buyers will take two or three days each and the entire process could last two to three weeks, according to people familiar with the situation.
A Knight Ridder spokesman declined to comment Friday.
The San Jose-based company -- the nation's second-largest newspaper chain and owner of the Mercury News and 31 other daily papers -- has been pressured by three major stockholders to put itself up for sale.
Preliminary bids from private equity firms and several others from media companies were received in early December, according to sources familiar with the bidding process.
As previously reported, Gannett, the nation's largest newspaper company, and McClatchy, another large chain, have both expressed interest. The MediaNews Group of Colorado is also considering a deal, possibly teaming up with one or more private equity partners.
The Blackstone Group, Providence Equity Partners and Kohlberg Kravis Roberts have made an initial bid as a team.
Other possible bidders include Spectrum Equity Partners, Thomas H. Lee Partners, the Texas Pacific Group and Madison Dearborn Partners.
A final round of bids and a decision by Knight Ridder's board is at least two months away. Legal and financial issues could add months more before the culmination of a sale, say sources knowledgeable about such deals.
The company could decline all offers if it finds them inadequate.
Newspaper industry stock prices have sagged as investors have grown nervous about competition from other media, including the Internet, declining circulation, and loss of advertisers through mergers and consolidations. Newspapers also have struggled to find a way to profit from the Internet.
Knight Ridder's largest shareholder, Private Capital Management of Naples, Fla., is leading the shareholder move to force a sale of the company. PCM owns 19 percent of Knight Ridder's stock. It demanded in a letter Nov. 1 that the company put itself up for sale.
Knight Ridder responded by announcing it would explore strategic alternatives to boost shareholder value, including the possible sale of the company.
Knight Ridder's stock closed at $64.39 Friday, up 1 percent, or 64 cents a share. The stock was at $53.38 a share the day before PCM made public its demand for a sale. PCM paid an average of $65 a share for its Knight Ridder stock.
Contact Pete Carey at pcarey@mercurynews.comor (408) 920-5419.
