Top shareholder demands sale of KR

SAN FRANCISCO (AP) -- Knight Ridder Inc.'s largest shareholder wants the nation's second-biggest newspaper publisher to seek a buyer, contending there are few other options left for a company that has been rapidly losing favor with investors as more advertising shifts to the Internet.

Private Capital Management LP, which owns a 19 percent stake in Knight Ridder, made the demand Tuesday in a letter addressed to the company's board.

"In light of limited revenue growth across the newspaper industry and the difficulties the company has faced in realizing fair value...for its shareholders, we believe the board should now pursue the competitive sale of the company," wrote Bruce Sherman, PCM's chief executive officer.

If Knight Ridder doesn't put the company on the sales block, PCM will consider supporting "more aggressive efforts" that might include an ouster of the company's management, Sherman wrote.

A spokeswoman for San Jose-based Knight Ridder declined to comment on PCM's letter. A message left after business hours at Naples, Fla.-based PCM also wasn't returned.

With 32 daily newspapers, Knight Ridder ranks as the nation's No. 2 newspaper publisher by circulation after Gannett Co. Knight Ridder's papers include the Akron Beacon Journal,. The Miami Herald, the San Jose Mercury News and The Philadelphia Inquirer.

Investors embraced the prospect of a sale. Knight Ridder's shares surged $4.62, or 8.7 percent, to close Tuesday at $58 on the New York Stock Exchange.

The Beacon Journal carried a story on the business section front.

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