Knight Ridder on Thursday concluded two days of meetings with a trio of private equity firms interested in buying the San Jose newspaper company, which put itself up for sale at the urging of three major shareholders.
Thursday's meeting ends the third week of presentations about Knight Ridder to interested parties. This week, Knight Ridder executives met with the Blackstone Group, Providence Equity Partners and Kohlberg Kravis Roberts.
Sources said Knight Ridder executives have been gathering additional information requested by the companies considering making offers for the nation's second-largest newspaper group and owner of the Mercury News.
Recent reports have stated some potential buyers have been surprised by the optimistic financial picture Knight Ridder has been presenting. Other reports said Knight Ridder has told interested parties that its profits can be sharply increased by cutting jobs and benefits and reducing the size of some of its 32 newspapers.
Knight Ridder's board of directors will set a deadline for final offers when the presentations are completed. The outcome should be known by mid-March. The groups attending Knight Ridder's presentations are under no obligation to make a bid.
Under an agreement signed by prospective bidders, the company will take a single offer from each group and there will be no succeeding rounds of bids. Knight Ridder's directors are not obligated to pick the highest bidder, nor even to sell the company.
Potential bidders identified so far are three media companies -- McClatchy, MediaNews Group and Gannett -- and two consortia of private equity companies. They are the Blackstone consortium which met with Knight Ridder this week, and an alliance of Thomas H. Lee Partners, Texas Pacific Group, Hellman & Friedman and Bain Capital. MediaNews is teamed with private equity firms Madison Dearborn Partners, Vestar Partners and Onex Corp.
So far, all but Gannett have attended presentations.
Also Thursday, the Society of Professional Journalists called for a debate on the sale, which it characterized as being done ``to satisfy the demands of a few major shareholders seeking larger short-term profits.'' The media play ``a role that is too important to be compromised by the quest for profits,'' the national journalism society said.
While Knight Ridder had a profit margin of 19 percent in 2004, its stock has suffered along with other publicly traded newspaper chains from investor concerns over a loss of readers and advertising to the Internet and increasing newsprint and labor costs.
Knight Ridder stock was trading at $53 a share, down from almost $80 a share a year and a half ago, when shareholder Private Capital Management demanded that it put itself up for sale. Two other major shareholders joined in the demand. Knight Ridder shares closed Thursday at $63.60.
Knight Ridder announces its fourth-quarter earnings Tuesday.
Contact Pete Carey at pcarey@mercurynews.com or (408) 920-5419.
