McClatchy Co. executives wrapped up talks Friday over a possible bid for Knight Ridder Inc. of San Jose, the nation's second-largest newspaper chain, according to a newspaper report.
Sacramento-based McClatchy, publisher of The Bee and 28 other daily and nondaily newspapers, spent Thursday and Friday meeting with Knight Ridder executives in the first in a series of presentations from would-be buyers this month, the San Jose Mercury News said.
Neither McClatchy nor Knight Ridder officials returned telephone calls Friday.
Major Knight Ridder shareholders are pressuring the company to sell the chain because of profitability problems fueled by declining advertising revenues and circulation.
Newspaper analysts have said McClatchy may be a long shot to acquire the larger Knight Ridder chain.
Knight Ridder, owner of 32 dailies, including the San Jose Mercury News and the Contra Costa Times, is about three times larger than McClatchy. Analysts estimate Knight Ridder could command $4 billion to $5 billion in a deal.
To finance the acquisition, industry experts say, McClatchy would probably need to team up with a private equity firm. Analysts also said McClatchy might be interested in some of Knight Ridder's properties, especially in North Carolina and South Carolina where McClatchy owns several papers.
Gannett Co., the nation's largest newspaper chain, and Denver-based MediaNews also expect to make pitches. In addition, three teams of private equity firms reportedly have made initial offers.
Final bids expect to be made after the Knight Ridder officials conclude their meetings with potential buyers.
