Another Major Investor Urges Knight Ridder to Sell

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, 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% stake in Knight Ridder.

The call comes just two days after Knight Ridder’s largest shareholder, Naples, Fla.-based investment firm Private Capital Management, demanded that the company 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.

Private Capital owns 19% of the San Jose-based firm, whose papers include the Miami Herald, the San Jose Mercury News and the Philadelphia Inquirer.

Newspaper stocks have fallen out of favor with investors this year because of waning advertising and circulation as more people go online for news.

Knight Ridder’s shares, already up more than 10% since Private Capital’s broadside against the company Tuesday, rose $2.47, or 4.2%, to $61.55.

Harris, a major investment firm with about $60 billion under management, disclosed the letter to Knight Ridder’s board in a regulatory filing Thursday.

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 firm .