Reply #100: Newspapers Watch Knight Ridder Auction

[UpInArms]

http://news.yahoo.com/news?tmpl=story&cid=509&e=19&u=/ap/20060309/ap_on_bi_ge/knight_ridder

NEW YORK - The auction process for Knight Ridder Inc., which winds down this week, is a moment of reckoning for the newspaper industry, a time when one of their biggest players will find out just what others are willing to pay for it.

However, the bidding also presents a thorny dilemma for newspaper companies themselves as they prepare their final offers, which are due on Thursday, for the publisher whose 32 daily newspapers include The Philadelphia Inquirer, The Miami Herald and the San Jose Mercury News.

If big newspaper owners such as Gannett Co. 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. "It's a Catch-22," says Merrill Lynch newspaper analyst Lauren Rich Fine.

San Jose, Calif.-based Knight Ridder has been mum about the bidding process all along, and declined again on Wednesday to make any comment.

Industry leader Gannett, Sacramento, Calif.-based McClatchy Co. and privately held MediaNews Group Inc., based in Denver, are all considered likely contenders but have given no outward sign of their intentions. Gannett and McClatchy both declined to comment, and MediaNews didn't return a call seeking comment.

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