From the Associated Press:
Knight Ridder Inc., the second-largest newspaper publisher in the country, came under renewed pressure from investors Thursday as its third-largest shareholder joined a call to put the company up for sale. Another major investor also said it would be taking an active role in discussing the company's future.
Harris Associates LP, a Chicago-based money manager, sent a letter to Knight Ridder's board urging the company to consider offers "immediately" given the wide gap between the company's current share price and its intrinsic value. Harris has an 8.2 percent stake in Knight Ridder.
The call comes just two days after Knight Ridder's largest shareholder, the Naples, Fla.-based investment firm Private Capital Management, demanded that the company to put itself up for sale or face a potential shareholder revolt that could lead to a shake-up of the company's management and board of directors.
[...]Newspaper stocks have fallen out of favor with investors this year because of concerns about waning advertising and circulation as more people go online for news. Knight Ridder's stock in particular has failed to benefit from several attempts to shore it up in recent months, including raising the dividend and buying back millions of shares in the open market.
Knight Ridder's shares, already up more than 10 percent since PCM's broadside against the company on Tuesday, rose another $3.04, or 5.2 percent, to $62.12 in heavy trading on the New York Stock Exchange Thursday afternoon.
Harris disclosed the letter to Knight Ridder's board in a regulatory filing Thursday. Harris is a major investment firm with about $60 billion under management, most of which is in the Oakmark family of mutual funds.
Knight Ridder's second-largest shareholder, Southeastern Asset Management Inc., also disclosed in a regulatory filing Thursday that it would be seeking a more active role in making recommendations to the company about its strategy. Southeastern holds 8.9 percent of Knight Ridder.
In his letter to Knight Ridder's board, Henry Berghoef, Harris Associates' director of research, was critical of the publisher's management, saying they had "failed to achieve results consistent with the leaders in the newspaper industry."
He also said that the company's shareholders, and not a management with "minimal ownership" in the company, should have the chance to evaluate offers for Knight Ridder.
Whispers from some News-Sentinel staffers reveal that there's been plenty of talk about these recent developments in the newsroom the last day or two. I remind all Knight Ridder employees that this blog allows anonymous comments and note that many of us are interested in what's being discussed.
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