Pete Carey, Mercury News
MediaNews Group Chief Executive Dean Singleton met this week with Knight Ridder officials about a possible purchase of the San Jose newspaper company, which has put itself up for sale under pressure from major stockholders.
In addition, sources confirmed that on Tuesday private equity firm Texas Pacific Group also met with Knight Ridder — owner of the Mercury News and 31 other daily newspapers.
Texas Pacific has been reported to be working with private equity firms Thomas H. Lee Partners, Hellman & Friedman and Bain Capital on a possible joint bid for Knight Ridder.
Singleton was joined by MediaNews President Joseph Lodovic. MediaNews is the nation’s seventh-largest newspaper group with 50 newspapers, including the Denver Post, the Oakland Tribune and the Hayward Daily Review.
The Denver company is privately held, with 2005 sales of $779 million. That means it doesn’t face the same shareholder pressure that forced Knight Ridder to put itself up for sale. Knight Ridder currently has a market capitalization of $4.2 billion.
Knight Ridder spokesman Polk Laffoon had no comment on MediaNews or Texas Pacific. A MediaNews spokesman also declined to comment Thursday.
Once Knight Ridder has made presentations to all potential buyers, final bids will be submitted. Prospective buyers are under no obligation to make a bid for the company. If Knight Ridder doesn’t like the offers, it could decide not to sell. But sources in the merger and acquisition business say once the process goes this far, the momentum usually leads to a deal.
Knight Ridder began meeting with prospective buyers last week. The first was McClatchy, a Sacramento-based newspaper chain that owns 12 dailies, including the Sacramento Bee, the Minneapolis Star-Tribune and the Raleigh News & Observer.
At the sessions, Knight Ridder executives make presentations on the company, its newspapers and its finances.
Knight Ridder announced in November that it would consider “strategic options,” including possible sale after its largest shareholders expressed disappointment in the company’s stock performance. In December, Knight Ridder received initial expressions of interest from potential buyers. A decision on whether to sell and to whom is not expected before early March.
Several other groups of private equity firms also have emerged as possible buyers. They are the Blackstone Group, Providence Equity Partners and Kohlberg Kravis Roberts & Co., and Madison Dearborn Partners and Vestar Partners.