Knight Ridder's No. 3 investor joins call to sell newspaper chain

Knight Ridder Inc.'s number three investor urged directors yesterday to put the newspaper firm up for sale, joining a call by the company's top shareholder this week.

Knight Ridder should ''promptly pursue a competitive sale," Harris Associates LP said yesterday in a regulatory filing. Chicago-based Harris owns 5.51 million shares, or 8.2 percent of outstanding stock.

Private Capital Management LP, Knight Ridder's largest stockholder with a 19 percent stake, said Tuesday that it had asked directors to auction the San Jose, Calif.-based company, citing a decline in share value.

''It's time for the board to become more proactive to achieve fair value or intrinsic value for the stock," Henry Berghoef, head of research at Harris, said yesterday in an interview.

''The most promising or most likely way to do that is to sell the company."

Knight Ridder shares had slumped 20 percent this year amid an industrywide drought in advertising sales before Private Capital urged the sale of the company.

The shares rose $2.47 to close at $61.55 on the New York Stock Exchange. They have jumped 15 percent the past three days.

Knight Ridder spokeswoman Lee Ann Schlatter said the company had no immediate comment on the Harris Associates letter.