Estimated read time: 2-3 minutes
This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
SAN JOSE, Calif. - The Newspaper Guild-Communications Workers of America announced Wednesday that the investment firm of California supermarket magnate Ron Burkle will help in its attempt to buy nine unionized Knight Ridder newspapers.
San Jose-based Knight Ridder, the nation's second-largest newspaper company, is exploring a sale under pressure from major shareholders unhappy with the company's performance. Knight Ridder has said it is only interested in selling its 32 newspapers company as a whole. That would force the union to buy the nine papers from whoever acquires Knight Ridder, if a sale goes through.
Burkle's Yucaipa Companies will provide major financing for the union's efforts to buy the newspapers. The union would not say how much money Yucaipa will give. Additional financing would come from banks and other sources.
"Yucaipa can certainly put up enough money to finance the deal," said Guild President Linda Foley. "There's no question now that the deal can be done."
In a statement, Foley called the partnership with Los Angeles-based Yucaipa "an important step along the way in what could be a lengthy process."
"There is no guarantee that our interest in preserving the union properties will be taken up by the prevailing acquisition group," Foley added. "But at the very least, with Yucaipa's critical support, we should be seen as an attractive partner."
Knight Ridder spokesman Polk Laffoon declined to comment.
Burkle, a close friend of former President Clinton, built a fortune through mergers and acquisitions of supermarket chains like Ralph's and Food4Less. He founded Yucaipa Companies in 1986.
Burkle could not be reached for comment Wednesday. But in the Guild's press release, he said, "Yucaipa is ready to apply its resources and expertise to form a mutually beneficial alliance with one or more announced bidders for the Knight Ridder chain. We believe in the future potential of these papers."
The newspapers the union wants to buy are the San Jose Mercury News, the Akron Beacon Journal in Ohio, the Duluth News Tribune in Minnesota, the Grand Forks Herald in North Dakota, the Lexington Herald-Leader in Kentucky, The Monterey County Herald in California, The Philadelphia Inquirer, the Philadelphia Daily News and the Saint Paul Pioneer Press in Minnesota. The papers employ 7,000 people and have a combined daily circulation of 1.3 million, according to the union.
As part of financing a purchase, employees will have an option to put part of their retirement money into the deal, said Chris Mackin, the president of Ownership Associates of Cambridge, Mass., one of union's two consultants.
"We're thrilled to have somebody of Yucaipa's and Burkle's stature as part of the team," Mackin said. "This is a real shot in the arm."
Said Ian Laird of Duff & Phelps Securities, which is also advising the union: "From the Guild's perspective it's extremely encouraging to have that type of financial supporter step up."
---
(c) 2006, San Jose Mercury News (San Jose, Calif.). Distributed by Knight Ridder/Tribune News Service.
