Bids are due Thursday and, following a series of meetings with prospective buyers, the list of bidders for Knight Ridder is down to three for now, according to the Star Tribune: McClatchy, a joint venture of MediaNews Group and Gannett, and a private equity consortium led by Thomas H. Lee Partners. (The PE firm is also part of the consortium behind today’s accepted VNU bid.) The Star Tribune, which is owned by McClatchy, attributes its info to investment bankers “familar with the negotiations;” the real focus is on McClatchy’s ability to finance a deal.
The MediaNews/Gannett combo could be tough to beat if the two companies are serious. As the story notes, McClatchy can be an aggressive bidder but the others have more money to spend. The PE consortium should have the most to spend but sentiment would be against that kind of sale if the bid is similar to one by a media company.
– Edward Atorino, media analyst, Benchmark Capital: “It’s important to remember that media properties as large as Knight Ridder do not come up for sale every day. … This is a one-time only event. If you want to be a major player, this is your shot.”
(Via Romenesko)
Meanwhile, Merrill Lynch analyst Lauren Rich Fince sent an analysis of the situation to clients this morning. She thinks McClatchy would be KR’s first choice “everything else being equal,” noting that “the press seems focused on the likelihood that MNI will post the winning bid at $65/sh.”
She also raises the “unlikely scenario” of KR rejecting all bids and opting instead for a substantial share buyback and writes that “a management or union-led buyout is a wildcard.”
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