Posted by: Jon Fine on November 14, 2005
The company will be all straight-faced about it, but in literally every case I can think of, the “strategic alternatives” spiel equals “for sale.”
The no-obvious-buyers scenario is calcifying into conventional wisdom and is mentioned in practically every article about Knight Ridder. But I’m not buying it. There will be interested parties, even if Knight Ridder, in the Nineties, boxed themselves into a corner that turned out to be a really lousy place to live circa 2005.
I won’t be surprised, as I’ve blogged and columnized, if Knight Ridder is broken up and doled out to several parties, instead of being sold to one buyer, as has been the case in virtually every other major newspaper deal in memory. I got into an interesting email exchange with Jay Rosen concerning such sale scenarios floated on this blog. Which, I swear, I will post about here when I get more than ten spare minutes.
*-The San Jose Mercury News initially reported on Nov. 4 that the company had “hired” Goldman Sachs to advise it on strategy; a later correction backpedaled and said Goldman’s been Knight Ridder’s banker since 1974—without getting into the substance of what, exactly, Goldman and Knight Ridder were discussing these days. Don’t bother looking: Both the Nov 4 piece and the correction that followed one day later are behind a firewall.
UPDATE: A pal, newspaper consultant and newsletter publisher David Cole, writes to remind me that the privately-held Freedom Communications, publisher of the Orange County Register and 27 other daily newspapers, got through the “exploring strategic options” thing without selling the whole shebang. Last year two private equity firms—the Blackstone Group and Providence Equity Partners—got 40% of the company for $2 billion. (The entire saga is far more complex and entertaining, and, alas, the best accounts are all behind firewalls.)
This was a family deal, and in it the family borrowed $1 billion to maintain control. Doubt that would move would fly at a publicly-traded company.