If there was no credit crunch putting a crimp on private equity, then maybe buyout firms would be breathing down the neck of newspaper publisher McClatchy Co., which is trading near its 52-week low of $12.50 a share.
Last year, McClatchy took a gamble and bought rival newspaper publisher Knight Ridder for $6.5 billion. Since closing the deal and selling some papers, McClatchy has fallen on hard times. In addition to its sagging stock price, leaving it with a market capitalization of about $1 billion, revenue also has declined, leading BloggingStocks to conclude:
The best hope for McClatchy shareholders is a buyout, which [CEO Gary] Pruitt told Forbes remains a "long-term option" that's not being seriously pursued. Given the trends in the industry, Pruitt may have to change his tune fairly quickly before the company's value erodes further. The company has attractive properties that would attract private equity players.
However, there may not be much Pruitt can do to attract a private equity bid given the troubled debt markets. After all, who would want to lend a $1 billion to buy a company with declining revenue who's future remains in question? Sounds like a recipe for disaster. — Matthew Wurtzel
See story from BloggingStocks
See story from Forbes
See related story from 24/7 Wall St. blog
See McClatchy Dealwatch
