PCM, in New Filing, Says It May Seek New Knight Ridder Board

By: Jennifer Saba Private Capital Management (PCM) filed an amendment with the Securities and Exchange Commission this morning seeking further action involving Knight Ridder, including nominating directors to the newspaper company's board.

PCM cites Knight Ridder's "limited response" to its well-publicized letter dated Nov. 1, which called for the sale of the company or parts of it. Knight Ridder has acknowledged the filings and said it would reply in "due course."

But PCM is reviewing its options including the possibility of nominating "a slate of directors for election by shareholders" at Knight Ridder's 2006 annual meeting.

According to The Associated Press, Knight Ridder's shares rose 78 cents, or 1.3% , to $62.81 in midday trading Thrusday on the New York Stock Exchange following PCM's latest SEC filing. The shares had slumped 20% this year prior to PCM's initial threat to the company last week, but have rallied since then from a low of $53.38 the day before PCM fired its first shot, AP reports.

PCM currently holds a 19% stake in Knight Ridder, making it the company's largest shareholder. Shortly after it called for the sale of the company, two additional shareholders followed suit. On Nov. 3, Harris Associates, which holds 8.1% of Knight Ridder shares, also filed a letter with the SEC seeking a possible sale of the company. On the same day, Southeastern Asset Management said it wanted to open discussions about a possible sale. It owns 8.9% of Knight Ridder stock.

Here is part of the latest amendment filed by PCM today:

*

In light of the Company's limited response to the serious concerns raised by a significant portion of the Company's shareholders, the Reporting Persons are currently reviewing governance options and other courses of action regarding the Company and anticipate that they may nominate a slate of directors for election by shareholders at the Company's 2006 annual meeting. The actions ultimately initiated by the Reporting Persons, if any, will in part depend on the Reporting Persons' evaluation of actions taken or proposed by the Company and others.

In addition, the Reporting Persons expect to unilaterally engage in other activities focused on realizing fair value for the Company's shareholders including, among other things, engaging in discussions with the Company, other shareholders and third parties regarding issues related to the maximization of shareholder value.