Knight Ridder Bids: The Waiting Game

Some stories following the continuing Knight Ridder bid saga:

Knight Ridder investors brace for word on bids: The bid acceptance will be decided by end of day today. Merrill Lynch analyst Lauren Fine predicted that the bids for Knight-Ridder are “unlikely to excite investors,” since a bid in the mid $60 per share range would represent a price of just 10 times 2005 EBITDA.

Newspapers Watch Knight Ridder Auction: If big newspaper owners such as Gannett don’t step up and make what investors believe to be a strong bid, pessimists might take it as a sign of waning confidence in the future prospects of an industry that many already believe to be in decline. On the other hand, paying a rich price could also lead investors to punish the acquiring company.

Moment of Truth For Knight Ridder: If the bids are high — above $70 a share or so, for a total of about $4.7 billion — it would signal that Wall Street hasn’t given up on the newspaper industry and its future. More deals and industry consolidation could follow. If the bids come in much lower, though, Knight Ridder could say no thanks, potentially sending prices of newspaper stocks tumbling.

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