Interest in papers high, McClatchy says
SAN JOSE, Calif. -- McClatchy said that interest in the 12 Knight Ridder papers it is selling -- including the San Jose Mercury News -- has been high and that it continues to ''feel good about our expectation for the proceeds" during a conference call with Wall Street analysts that mainly focused on its disappointing first-quarter earnings.
As McClatchy prepares to double its bet on newspapers by acquiring Knight Ridder, its latest earnings report did little to ease investors' worries that the company is expanding too deeply into a fading industry.
Last month, McClatchy said that it planned to acquire Knight Ridder of San Jose in a deal valued at $4.5 billion, using cash and stock. McClatchy said it planned to sell 12 Knight Ridder newspapers to help finance the deal.
Investor reaction to the deal has been mixed. McClatchy's stock has fallen 11.7 percent since the deal was announced, and the value of the deal has slipped to $4.29 billion. Many investors are waiting to see how much money the sale of the 12 papers fetches.
In a conference call with analysts, McClatchy chief executive Gary Pruitt declined to provide much detail on the current sale process. Pruitt said deals for the papers would be announced as agreements were signed.
''We are moving quickly to divest the 12 papers identified for sale, partly to focus on integrating the other 20 into the new McClatchy and partly to end uncertainty for the employees of those papers," Pruitt said. ''We have been gratified by the level of interest in these 12 newspapers we are selling, and we still intend to divest some and perhaps all of those papers simultaneously, with the closing of the Knight Ridder acquisition this summer."
It remains unclear when the sale of any of the 12 papers will be unveiled.However, Pruitt said he still hoped to close the deal with Knight Ridder on July 1.
MediaNews, a privately held newspaper company based in Denver, has expressed interest in the Mercury News. And Yucaipa Cos., a private equity firm recruited by the Newspaper Guild, is interested in all 12 newspapers.
