- The Washington Times - Wednesday, April 26, 2006

NEW YORK (AP) — MediaNews Group Inc., publisher of the Denver Post and other newspapers, is buying four newspapers from McClatchy Co. for $1 billion in cash with backing from Hearst Corp.

The four papers — the San Jose Mercury News, the Contra Costa (Calif.) Times, the Monterey (Calif.) County Herald and the St. Paul (Minn.) Pioneer Press — currently are owned by Knight Ridder Inc., which McClatchy is buying.

The deal announced late yesterday would strengthen MediaNews’s presence in Northern California, where it already owns several papers in the San Francisco Bay area.

The four papers are among the 12 Knight Ridder properties that McClatchy has said it intends to sell since they do not meet McClatchy’s acquisition criteria, which include being located in rapidly growing markets.

MediaNews’ interest in the newspapers had been widely known. The three Northern California papers would complement the company’s existing holdings, which include the Oakland Tribune and the Marin Independent Journal. MediaNews owns a number of newspapers in geographic clusters, which helps reduce production and other costs and allows for group advertising sales.

“These were the newspapers that excited us the most about Knight Ridder,” MediaNews Chief Executive Officer William Dean Singleton said, calling the deal “a wonderful opportunity at a fair price.”

McClatchy would have faced antitrust difficulties owning the St. Paul, Minn., paper since it already owns the Star Tribune in neighboring Minneapolis.

McClatchy said yesterday that the Justice Department told the company that it would seek additional information regarding the Minneapolis-St. Paul area, indicating that regulators did not see other antitrust concerns with the Knight Ridder takeover.

The agreement calls for MediaNews to acquire the San Jose Mercury News and the Contra Costa Times, which then would be folded into the California Newspaper Partnership, an entity in which it has a 54 percent stake.

The other two stakeholders in the partnership, industry leader Gannett Co. and the privately held Stephens Media Group, have agreed to contribute their share of paying for the two papers, according to a joint statement from McClatchy and MediaNews.

Separately, Hearst, publisher of the San Francisco Chronicle, will buy the Monterey County Herald in California and the St. Paul Pioneer Press and then transfer them to MediaNews in exchange for a stake in all newspapers that MediaNews owns outside the Bay Area.

Once the deal closes, MediaNews would become the fourth-largest newspaper company in the country in terms of circulation, with about 2.7 million daily circulation and 53 daily newspapers.

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