Now maybe this gets interesting. Yucaipa Cos., Ron Burkle's investment company, will now get at least some of the company-by-company financials it wants. Those are the financials of 12 soon-to-be-formerly-known-as-Knight Ridder (STBFKAKR) ones that McClatchy immediately deciding on divesting upon winning its KR bid.
Why Yucaipa couldn't get the numbers earlier is a bit of a mystery. McClatchy had said that the confidential information could only be made available to those publishers who had signed confidentiality agreements with KR, those who had participated -- and been accepted to participate -- in the original bidding for all of KR. Knight Ridder then said it would allow new bidders access. A few days of confusion ensued. Then on Thursday, the Newspaper Guild (which spurred employee-friendly Yucaipa to bid) announced that Yucaipa would get the info.
How this will affect the bidding though is still unclear.
McClatchy accepted bids in the "first round" of bidding on March 28. Yucaipa, apparently, was the only bidder to say they'd take all 12 papers, which include a California group (San Jose Mercury News, Contra Costa Times, the Monterey Herald), a Philly duo (Philadelphia Inquirer, Philadelphia Daily News), a North Central group (the Grand Forks Herald, the Duluth Tribune and the Aberdeen American), the Fort Wayne (IN) News Sentinel, the Wilkes-Barre Times Leader and two legendary Knight Ridder stalwarts, the Saint Paul Pioneer Press and the Akron Beacon Journal.
Yucaipa made its first-round bid for the first 12, though it had to bid blind, without all the financials. Now it can fine-tune its offer, at least somewhat. The Guild's announcement (McClatchy added no comment to published stories) said that McClatchy had agreed to make information available on papers "as they come to market." That probably means that if some papers reach a second round of bidding, financials may be made available.
It also means some of the papers may not come back to a second round, having been bid on and maybe had deals sealed after the first bidding round. Industry observers have whispered that McClatchy and Media News deal around the California papers was done, or close to done, early on. It is now believed that Media News has made a bid for those three, plus the Philadelphia papers and the Pioneer Press. (Observers say that while Media News made all the preparations to bid on all of KR originally, it did not put forth a final bid for the whole company.)
In fact, will their be a second bidding round? Gary Pruitt told me yes, when we spoke at NAA. The question will be what's left over from the KR sale leftovers.
This much is clear: CEO's Gary Pruitt's #1 goal in the divestiture is getting it done cleanly. That means getting the deals done, past any Justice Department anti-trust review and the properties ready to be transitioned simultaneous to the close of its KR deal, around July 1.
The #2 goal may be maximizing the amount of the sale prices. That's understandable, from an operational viewpoint -- why get bogged down taking over papers (temporarily) that you're not intending to run? (I've suggested that strategic goals should play as well, though they would undoubtedly complicate both timing and pricing.)
Pruitt will have to balance those goals, keenly mindful of maximizing the offset of his purchase price and of doing the very best by McClatchy shareholders who want to see high prices fetched.
Wall Street is waiting for this second shoe to drop. What indeed is the value of papers, post McClatchy's KR buy? Will they be collectively worth closer to the bottom estimate of $1.4B or the high one of $2.0B? Investor pressure is already building on Tribune, similar to the noises first heard around KR last fall, and the price McClatchy fetches will inform that pressure deeply.