Latest talk on KRI sale

The Wall Street Journal reported Thursday that three private equity firms are considering purchasing Knight Ridder. The Blackstone Group, Providence Equity Partners, and Kohlberg Kravis Roberts have banded together in a possible bid for the newspaper company.

The potential deal, if it pans out at all, is still in the early stages; the trio might balk at the price tag -- Knight Ridder's market capitalization is $4 billion. However, the paper reported that some financial buyers say that Knight Ridder could be attractive under new management. Other private equity firms are sniffing around as well. The first rounds of bids are due Dec. 9, according to the Journal.

Meanwhile, Morgan Stanley analyst Douglas Arthur issued a report on Tuesday that considered the implications of a possible sale of the company. Morgan Stanley, which was hired by Knight Ridder as a second advisor to Goldman Sachs, examines several different scenarios that involve potential buyers.

Or, the sale of Knight Ridder could fall through based on some of these premises:

* Knight Ridder's board rejects Private Capital Management's "aggressive approach," forcing PCM to dump its 19% of the company's shares.

* The industry slump continues and investors lose confidence.

* A potential buyer could run into regulatory issues.

* There are a limited number of interested parties to place bids.

* Knight Ridder could buy PCM's shares.

* Knight Ridder unions could fight any attempt to merge it with another company.

Click on the headline for a report in Editor & Publisher.