By: Knight Ridder shares rose $1.14, or 1.8 percent, to $63.80 in morning trading on the New York Stock Exchange. For McClatchy, said to be the leading bidder for the company after Thursday's action, shares rose 11 cents to $52.04 while Gannett shares gained 31 cents to $60.90, also on the NYSE.
At stake is the ownership of 32 newspapers nationwide, including the San Jose Mercury News, The Philadelphia Inquirer and The Miami Herald. Knight Ridder was forced to put itself up for sale last November by its largest shareholders, who were frustrated with the company's lagging share price.
Knight Ridder spokesman Polk Laffoon declined to comment on the bidding. McClatchy officials did not return calls for comment.
Laffoon said the San Jose, Calif.-based company would not comment before the auction's "resolution" on Sunday, the financial news site MarketWatch reported Thursday.
However, any announcement may be "several days" after that, he said. Laffoon declined to comment to The Associated Press on that report.
Knight Ridder's board was scheduled to meet in New York over the weekend, the San Jose Mercury News reported.
If Knight Ridder decides the bids are too low or otherwise unattractive, analysts note that the company could pursue other options for increasing its share value, such as borrowing money to buy back a significant number of its shares.
With Knight Ridder's stock trading in the low-$60 range recently, investors are not expecting a ferocious bidding war for the company. Merrill Lynch analyst Lauren Rich Fine wrote in a note to investors that if bids come in at the expected range of mid-$60s per share, it would be "unlikely to excite investors."
At that price, the price would reflect about 10 times the company's cash earnings per share last year, below the historical average takeover price in the industry of 12 to 13 times trailing earnings, Fine wrote.
Many investors will be looking to what price, if any, Knight Ridder may choose to sell itself at to gauge investors' outlook on the newspaper industry, which has been largely negative recently over concerns about declining circulation trends and the migration of readers and advertisers to the Internet.
However, some investors say Knight Ridder's case has several special circumstances that may not apply to every case, including several papers in suffering markets such as Philadelphia and Miami, which may help account for a multiple that could be below historical averages.
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