Archive for August 13th, 2010

McClatchy’s KR buy called ‘worst’ move

Friday, August 13th, 2010

Bloomberg is calling the McClatchy Company’s acquisition of the much bigger Knight Ridder newspaper chain the worst of the biggest takeovers made during the last mergers-and-acquisitions boom.

“McClatchy’s purchase of the Knight Ridder Inc. newspaper chain, for $4.1 billion in 2006, ranked the worst of the 100 on Bloomberg’s list, with McClatchy shares underperforming the Bloomberg Advertising Age AdMarket 50 Index by 93 percentage points,” the article says. “Sacramento, California-based McClatchy borrowed cash to buy the chain as newspaper real-estate advertising plunged. Elaine Lintecum, McClatchy’s treasurer, declined to comment.”

The move made McClatchy, which was the nation’s eighth-largest newspaper publisher, the nation’s third-largest chain (once it sold off some Knight Ridder papers), but saddled it with enormous debt just as the industry began its ongoing decline.

More than half of the 100 mergers and acquisitions should never have happened, Bloomberg says.