Knight Ridder gets an ultimatum

[Judi Lynn]

Knight Ridder gets an ultimatum
John Reinan, Star Tribune
November 2, 2005


A large investor is demanding that Knight Ridder Inc., the nation's second-largest newspaper chain, put itself up for sale or auction off its flagship publications, which have wrestled with flat advertising revenue and stagnant or declining circulation.

In a letter Tuesday to the Knight Ridder board of directors, the investment firm Private Capital Management (PCM) threatened to launch a hostile takeover if the company does not move to "aggressively pursue" a competitive sale.

It's too early to say whether any suitors will emerge for Knight Ridder or whether PCM will be able to make good on its threat to oust a majority of the company's directors, but Tuesday's disclosure -- and the potential that it could trigger more mergers or consolidation -- could cause investors to take a new look at newspaper stocks.
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"There's always been a tension between journalism and business, but in the last decade, business has been very much predominant," the Poynter group's Naughton said. "The mystery to me is why communities don't rise up in anger at what's being done to their media in the name of profit."
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http://www.startribune.com/stories/535/5702434.html
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