ap, the privately held publisher of The Denver Post and 40 other daily newspapers, could add a partner in its potential bid for Knight Ridder Inc., the San Jose, Calif., newspaper publisher that put itself on the auction block in November.
Denver-based MediaNews is discussing an alliance with Gannett, the nation’s largest newspaper chain, according to a report Tuesday in the San Jose Mercury News, a Knight Ridder paper.
MediaNews and Gannett, which publishes USA Today, would bid jointly for Knight Ridder, the nation’s second-largest newspaper chain, according to anonymous sources cited by the Mercury News.
A Knight Ridder spokesman, Polk Laffoon, declined to comment on the possible alliance when reached Tuesday.
William Dean Singleton, MediaNews vice chairman and chief executive, could not be reached Tuesday for comment.
MediaNews has already partnered with a trio of private-equity firms, Madison Dearborn Partners, Vestar Partners and Onex.
Published reports indicated that Gannett, based in McLean, Va., recently skipped a meeting with Knight Ridder officials and had pulled its name from the bid process.
A MediaNews-Gannett partnership would offer strategic and financial advantages for both companies, said John Morton, an independent newspaper analyst in Silver Spring, Md.
“They have a history of collaborating, so I don’t think there are too many roadblocks” to a partnership, said Morton, head of Morton Research Inc.
The two companies already operate the Detroit Free Press, owned by Gannett, and The Detroit News, owned by MediaNews, under a joint operating agreement.
Gannett and MediaNews also have partnerships in Texas, New Mexico, Pennsylvania and California, Morton said. The partnerships cut costs for both companies by sharing printing, distribution and advertising expenses.
If a deal for Knight Ridder were reached, Media News and Gannett would likely divide Knight Ridder’s 32 papers, said Owen Van Essen, president of Dirks, Van Essen and Murray, a Santa Fe-based newspaper brokerage.
Because of concerns about federal regulatory approval, Gannett would likely not be interested in Knight Ridder papers in markets where it operates television stations. Those markets include Macon, Ga.; Camden, N.J.; and St. Paul, Minn.
Likewise, Knight Ridder would prefer to sell its papers as a whole instead of piecemeal because of tax implications, Van Essen said.
Knight Ridder, whose publications include The Miami Herald and The Philadelphia Inquirer, has been under pressure from shareholders to boost its lagging share price. Shares closed Tuesday up 1.6 percent at $61.98, below their 52-week high of $69.09.
Staff writer Will Shanley can be reached at 303-820-1260 or wshanley@denverpost.com.
