The McClatchy Co. emerged Thursday as the leading bidder to acquire Knight Ridder, which owns The Philadelphia Inquirer and the Miami Herald, with a binding bid worth more than $4.8 billion in cash and stock, according to people involved in the auction.
A group of private-equity firms, including the Texas Pacific Group and Thomas H. Lee Partners, submitted a nonbinding bid, known as an indication of interest, for about $4.7 billion in cash, the sources said.
A third group – made up of Denver-based ap, several private-equity firms and possibly the Gannett Co. – remains interested in the newspaper chain, the sources said, though it was unclear Thursday night whether the group had submitted a formal bid. MediaNews owns The Denver Post and more than three dozen other daily newspapers.
Knight Ridder’s board is expected to meet this weekend to weigh the offers and could announce a decision as soon as Monday, the sources said. The company has a market value of $4.2 billion.
None of the bidders or Knight Ridder would comment.
The offer by McClatchy is worth more than $65 a share.
If bids came in below $60 per share, it is possible Knight Ridder would reject the offers, according to Lauren Rich Fine, a media analyst with Merrill Lynch, in a research report issued Wednesday.
Larry Grimes, president of W.B. Grimes, a media investment bank in Gaithersburg, Md., said a MediaNews-Gannett partnership has deep enough pockets and the newspaper expertise to wring cost savings from the Knight Ridder operations.
MediaNews and Gannett already have partnerships in Texas, New Mexico, Pennsylvania, California and Michigan.
Under pressure from its three biggest shareholders, Knight Ridder announced Nov. 14 that it was considering a sale. After a sharp run-up in early November on word that one of the shareholders – Private Capital Management, controlled by Bruce S. Sherman – had demanded a sale, shares of the company have barely moved. They closed Thursday at $62.66, up 20 cents.
Denver Post staff writer Will Shanley contributed to this report.