McClatchy Co. disclosed several new details about its pending acquisition of newspaper company Knight Ridder Inc. in a regulatory filing made late Friday, including the fact that the outcry from Knight Ridder’s three largest shareholders, which ultimately led to the deal, dated back to last April.
Also, the deal will have to be approved by at least 80 percent of Knight Ridder’s shareholders in accordance with Knight Ridder’s bylaws, according to the filing made with the Securities and Exchange Commission. That threshold is not expected to be a problem, however, since more than 90 percent of the shares are held by institutions.
The filing did not shed new light on the main unresolved question surrounding the deal: who may buy the 12 Knight Ridder newspapers that McClatchy plans to sell as part of the transaction, which was announced March 13.
MediaNews Group Inc. has said it is having a look, and is believed to be most interested in Knight Ridder’s northern California papers, which would complement its existing newspapers in the Bay Area.
The papers to be sold include two in Philadelphia, the San Jose Mercury News and the St. Paul Pioneer Press in Minnesota.
McClatchy said in the filing that those papers account for 45 percent of Knight Ridder’s total daily circulation.
According to the filing, the protests from Knight Ridder’s largest shareholders date back to April of last year, when Bruce Sherman of Private Capital Management, the company’s largest shareholder with a stake of about 19 percent, complained to Knight Ridder’s chairman, Tony Ridder, about the company’s stock performance and suggested a sale.
Knight Ridder’s board initially concluded that it was not a good time to sell the company, an opinion that it repeated to Sherman in July. Sherman had disclosed in a filing of his own in November that he had been agitating for action at Knight Ridder since as early as last July.
McClatchy also disclosed in the filing that 11 parties, which it did not name, expressed initial interest in Knight Ridder in December, but that in the end only McClatchy submitted a full, final bid by the March 9 deadline.
A McClatchy spokeswoman declined to comment beyond what was contained in the filing.
A consortium of investors put in a tentative proposal that was “substantially below” the McClatchy bid, according to the filing, but it did not specify at what price.