San Francisco – A federal judge said Thursday that she is unlikely to issue an order that would temporarily block Media News Group Inc.’s purchase of newspapers from McClatchy Co.
U.S. District Judge Susan Illston told lawyers in the hearing that the temporary restraining order sought by San Francisco real estate investor Clinton Reilly doesn’t appear to be justified. She said she would make a decision by today.
Denver-based ap, which owns The Denver Post and dozens of other daily newspapers nationwide, now appears one step closer to closing its $1 billion deal with McClatchy, the Sacramento, Calif.-based newspaper chain.
“We are pleased to clear this hurdle and can now move forward,” said Jody Lodovic, president of MediaNews, adding that the deal could close as early as next week, pending federal regulatory approval.
Reilly claims in a lawsuit that the sale would stymie competition in northern California. He asked Illston to halt the deal for 10 days.
McClatchy agreed in April to sell the San Jose Mercury News, Contra Costa Times and a number of smaller California papers to privately held Media News for $736.8 million. In addition, New York-based Hearst Corp. agreed to buy the St. Paul Pioneer Press and Monterey County Herald from McClatchy for $263.2 million. Hearst will trade those two papers for a stake in MediaNews’ assets outside of the San Francisco Bay Area market, where Hearst owns the San Francisco Chronicle.
Separately, a federal judge in Utah has removed herself from a long-running dispute between MediaNews, which owns The Salt Lake Tribune, and the McCarthey family over a financial appraisal of the newspaper. The McCarthey family, which once owned the newspaper, is seeking to buy it from MediaNews.
Lodovic said the decision by Judge Tena Campbell to recuse herself would merely slow down the dispute as a new judge is appointed and brought up to speed on the 5-year-old case.
Staff writer Will Shanley and Bloomberg News contributed to this report.
