Newspaper Chain Agrees to a Sale for $4.5 Billion

[SOURCE: New York Times, AUTHOR: Katharine Seelye & Andrew Ross Sorkin]
Knight Ridder, the second-largest newspaper company in the United States, agreed last night to sell itself for about $4.5 billion in cash and stock to the McClatchy Company, a publisher half its size, according to people involved in the negotiations. Under the terms of the deal, McClatchy agreed to pay about $67 a share in cash and stock for Knight Ridder. About 60 percent of the payment will be in cash, while the rest will be in McClatchy shares. Because Knight Ridder is so much larger than McClatchy, the merger is likely to create some upheaval for both companies. McClatchy could sell or close some of the Knight Ridder papers and could take further cost-control measures in its own newsrooms to help finance the deal. It was uncertain when the deal would be completed. Knight Ridder has almost three times as many dailies as the 12 owned by McClatchy. Knight Ridder's $3 billion in revenue for 2005 was more than twice McClatchy's $1.2 billion. While the Knight Ridder papers are profitable, some are more troubled than others and may be a drag on McClatchy's bottom line. Analysts speculate that the company could shut down The Philadelphia Daily News and possibly sell The Inquirer, since the business climate in Philadelphia is sluggish and the papers face tough competition from a ring of suburban dailies. On the other hand, they say, The Inquirer generates a lot of cash, something McClatchy will need as it goes into debt to pay for Knight Ridder.
http://www.nytimes.com/2006/03/13/business/media/13knight.html
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* Knight Ridder Nears Sale to McClatchy For $4.5 Billion in Cash, Stock
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