By: Joe Strupp The Newspaper Guild plans to continue gathering investors for a potential purchase of several Knight Ridder properties despite the assertion this week by a company spokesman that the newspaper chain would not be sold in pieces.
Linda Foley, guild president, said she remained hopeful that an effort to purchase the nine Knight Ridder newspapers with guild representation could succeed. "We believe, as we have all along, that we will enhance shareholder value," Foley said Thursday. "We believe that eventually Knight Ridder will entertain a bid from employees. This is a company that has had a history of valuing employees and being a family company."
Foley's comments came a day after Knight Ridder spokesman Polk Laffoon dismissed the idea of a partial purchase. "There is no interest here in selling the company piecemeal," Laffoon told the San Francisco Chronicle in Wednesday's editions. "Knight Ridder is for sale, to the extent it is for sale, as a whole and not as a piecemeal thing.''
Guild officials launched the idea of a partial buyout last week with the announcement that the union had retained two advisory firms -- Duff & Phelps Securities, LLC, of Chicago and Ownership Associates, Inc. of Cambridge, MA -- to "work with the union to attempt a 'worker friendly' buyout of certain properties of the Knight Ridder newspaper chain."
Knight Ridder has been seeking buyers for several weeks following complaints from its largest shareholders that the chain was "undervalued."
Guild officials had hoped to bring together investors to buy the nine Knight Ridder papers that are represented by the guild. The company owns 32 newspapers, as well as a Washington bureau. Those guild papers that were targeted include: the Philadelphia Daily News, Philadelphia Inquirer, San Jose Mercury News, St. Paul (Minn.) Pioneer Press, Akron (Oh) Beacon Journal, Duluth (Minn.) News Tribune, Lexington (Ky.) Herald-Leader, Monterey (Ca.) Herald, and the Grand Forks (N.D.) Herald.
"We are still out there reaching out to equity partners," Foley said. When asked if the union could organize enough investors to purchase the entire Knight Ridder chain, she said, "I don't think that is realistic."
But the guild president said Knight Ridder could always change its mind and allow a break-up purchase. "We think the bid for the nine papers is still viable," she said. "They are saying that at this time they are only entertaining bids for the entire property. But, at some point, Knight Ridder would be foolish not to entertain other configurations of a sale. Otherwise, they do not get maximum value."
Laffoon could not be reached for comment Thursday due to vacation, his office said.
If Knight Ridder is sold in its entirety to one buyer, the guild group could possibly buy from that entity as well, Foley said. "We are hopeful," she added.
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