By: E&P Staff
Gannett and Stephens Media Group are allegedly involved with MediaNews Group’s attempt to buy three Knight Ridder papers in California, according to the Los Angeles Times. The trio, which is involved in the alliance California Newspapers Partnership, already owns 23 papers in the state.
The Los Angeles Times reported that sources close to the negotiations say that both Gannett and Stephens Media Group want in on the Knight Ridder papers on the block — the San Jose Mercury News, Contra Costa Times, and The Monterey County Herald.
The newspaper said on Thursday that MediaNews Group reportedly put on the table a $1 billion offer for the three papers and the St. Paul Pioneer Press in Minnesota. MediaNews Group CEO Dean Singleton did not return calls placed on Thursday or late Friday morning.
Under the California Newspapers Partnership, MediaNews Group, which controls about 54% of the partnership, must give the other two companies the option to participate in any new acquisitions. Gannett holds roughly a 20% interest in the group and Stephens holds about 26%.
But during a quarterly conference call last week, Gannett Chairman Douglas McCorkindale told a group of analysts and investors that Gannett was having nothing to do with 12 orphan papers up for sale. When asked during the question and answer session on Gannett’s thoughts “direct or indirect on the re-marketing of Knight Ridder properties” and what level was the company involved in the auction, McCorkindale responded, “We are not involved.”
Gannett Spokeswoman Tara Connell had no comment about this morning’s story in the Los Angeles Times.
Meanwhile, Moody’s Investors Service downgraded McClatchy to a “junk” rating on the bank loan it has secured to buy Knight Ridder. The new rating does not affect McClatchy’s rating on other existing debts, according to The Sacramento Bee. Standard & Poor’s gave McClatchy an investment-grade rating.
“‘We were disappointed with it, but clearly we think S&P got it right,'” Elaine Lintecum, McClatchy’s treasure, told the Bee. “‘We don’t have to agree with [Moody’s], but we have to respect it.'”