-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FeyUYC2V4y1Y1OasO8UUkOLaJBqM5atkk96uPnbXf+HBlFl744gx8HIvsM3ncXOe Q74l4B0R+nBq8Og0eLEblQ== 0000897226-05-000213.txt : 20051101 0000897226-05-000213.hdr.sgml : 20051101 20051101145042 ACCESSION NUMBER: 0000897226-05-000213 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20051101 DATE AS OF CHANGE: 20051101 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: KNIGHT RIDDER INC CENTRAL INDEX KEY: 0000205520 STANDARD INDUSTRIAL CLASSIFICATION: NEWSPAPERS: PUBLISHING OR PUBLISHING & PRINTING [2711] IRS NUMBER: 380723657 STATE OF INCORPORATION: FL FISCAL YEAR END: 1227 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-16367 FILM NUMBER: 051169426 BUSINESS ADDRESS: STREET 1: 50 W SAN FERNANDO ST CITY: SAN JOSE STATE: CA ZIP: 95113 BUSINESS PHONE: 4089387700 MAIL ADDRESS: STREET 1: 50 W SAN FERNANDO ST CITY: SAN JOSE STATE: CA ZIP: 95113 FORMER COMPANY: FORMER CONFORMED NAME: KNIGHT RIDDER NEWSPAPERS INC /FL/ DATE OF NAME CHANGE: 19860707 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: PRIVATE CAPITAL MANAGEMENT CENTRAL INDEX KEY: 0000897226 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 593654603 STATE OF INCORPORATION: FL FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 8889 PELICAN BAY BLVD STREET 2: STE 500 CITY: NAPLES STATE: FL ZIP: 34108 BUSINESS PHONE: 9412542525 MAIL ADDRESS: STREET 1: 8889 PELICAN BAY BLVD STREET 2: STE 500 CITY: NAPLES STATE: FL ZIP: 34108 FORMER COMPANY: FORMER CONFORMED NAME: PRIVATE CAPITAL MANAGEMENT INC /FL DATE OF NAME CHANGE: 19950223 SC 13D 1 kri.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 Knight-Ridder, Inc. (Name of Issuer) Common Stock, par value $0.02 1/12 per share (Title of Class of Securities) 499040103 (CUSIP Number) Mr. Chad Atkins Private Capital Management, L.P. 8889 Pelican Bay Blvd. Suite 500 Naples, FL 34108 (239) 254-2500 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) November 1, 2005 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [X] CUSIP No. 499040103 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Private Capital Management, L.P. (I.R.S. Number 59-3654603) Mr. Bruce S. Sherman Mr. Gregg J. Powers 2. Check the Appropriate Box if a Member of a Group (a) (b) 3. SEC Use Only 4. Source of Funds (See Instructions) OO 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) 6. Citizenship or Place of Organization Private Capital Management, L.P. Delaware Mr. Bruce S. Sherman USA Mr. Gregg J. Powers USA 7. Sole Voting Power Private Capital Management, L.P. 0 Mr. Bruce S. Sherman 0 Mr. Gregg J. Powers 0 8. Shared Voting Power (Estimated as of 11/1/2005) Private Capital Management, L.P. 9,100,000 Mr. Bruce S. Sherman 9,100,000 Mr. Gregg J. Powers 9,100,000 9. Sole Dispositive Power Private Capital Management, L.P. 0 Mr. Bruce S. Sherman 0 Mr. Gregg J. Powers 0 10. Shared Dispositive Power Private Capital Management, L.P. 12,810,705 Mr. Bruce S. Sherman 12,810,705 Mr. Gregg J. Powers 12,810,705 11. Aggregate Amount Beneficially Owned by Each Reporting Person Private Capital Management, L.P. 12,810,705 Mr. Bruce S. Sherman 12,810,705 Mr. Gregg J. Powers 12,810,705 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares 13. Percent of Class Represented by Amount in Row (11) Private Capital Management, L.P. 18.9% Mr. Bruce S. Sherman 18.9% Mr. Gregg J. Powers 18.9% 14. Type of Reporting Person (See Instructions) Private Capital Management, L.P. IA Mr. Bruce S. Sherman IN Mr. Gregg J. Powers IN Item 1. Security and Issuer. This Schedule 13D relates to the Common Stock, $0.02 1/12 par value per share (the "Common Stock"), of Knight-Ridder, Inc., a Florida corporation, the principal executive office of which is located at 50 West San Fernando Street Suite 1500, San Jose California. The Common Stock is traded on the New York Stock Exchange. Item 2. Identity and Background. (a) Name. The persons filing this Schedule 13D are Private Capital Management, L.P. ("PCM"), Bruce S. Sherman, and Gregg J. Powers. PCM, Mr. Sherman, and Mr. Powers are collectively referred to as the "Reporting Persons." Mr. Sherman is CEO of PCM and Mr. Powers is President of PCM, and as such both exercise shared dispositive with respect to shares held by PCM on behalf of its clients. Messrs. Sherman and Powers also exercise shared voting authority over shares of Common Stock managed by PCM for clients that have delegated proxy voting authority to PCM. Such voting authority may be withdrawn by PCM clients at any time. Each of PCM and Messrs. Sherman and Powers disclaims beneficial ownership of the shares held by PCM (including the Common Stock) and disclaim the existence of a group. (b) Business Address. Each of the Reporting Person's business address is 8889 Pelican Bay Blvd. Suite 500, Naples, Florida 34108. (c) Principal Occupation. PCM is a registered investment adviser under the Investment Advisers Act of 1940. PCM has the power and authority to make decisions to buy and sell securities on behalf of its clients. Mr. Sherman, as CEO of PCM, and Mr. Powers, as President of PCM, have the authority to direct the actions of PCM including decisions to buy and sell stock. (d) None of the Reporting Persons has, during the last five years, been convicted in any criminal proceedings (excluding traffic violations or similar misdemeanors). (e) None of the Reporting Persons has, during the last five years, been a party to a civil proceeding of any judicial or administrative body of competent jurisdiction as a result of which such person was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or a finding of any violation with respect to such laws. (f) PCM is a limited partnership organized under the laws of the state of Delaware. Mr. Sherman and Mr. Powers are United States citizens. Item 3. Source and Amount of Funds or Other Consideration. PCM has acquired 12,810,705 shares of Common Stock at an aggregate purchase price of $840,011,008.15 on behalf of its clients. Funds for these purchases were derived from PCM clients. Item 4. Purpose of Transaction. The Reporting Persons purchased the shares of Common Stock of the Company on behalf of PCM clients for investment purposes. Depending on the Reporting Persons' assessment of future developments, one or more of the Reporting Persons may acquire additional securities on behalf of PCM clients or may determine to sell or otherwise dispose of all or some holdings in the Company. For the reasons stated in the letter to the Company's Board of Directors dated November 1, 2005, a copy of which is attached as an exhibit to this filing, the Reporting Persons request that the Company's management and Board promptly pursue a competitive sale of the Company. In the absence of aggressive actions on the part of management and the Board to sell the Company, the Reporting Persons anticipate that they would strongly consider supporting efforts that might be initiated by other parties seeking to change the composition of the Board, install new management, acquire a majority of the Company's voting shares, or take other action to maximize shareholder value. Representatives of PCM have discussed (and may continue to discuss) PCM's concerns regarding the persistent disparity between the fair value of the Company's assets and the trading range of its shares, as well as other issues related to the maximization of shareholder value. Except as set forth herein and in the letter to the Company's Board, dated November 1, 2005 and attached as an exhibit hereto, PCM has no present plans or proposals that would result in or relate to any of the transactions or changes listed in Items 4(a) through 4(j) of Schedule 13D. Item 5. Interest in Securities of the Issuer. (a) Number of Percentage Reporting Person Shares of Shares Private Capital Management, L.P. 12,810,705 (%)18.9 Mr. Bruce S. Sherman 12,810,705 (%)18.9 Mr. Gregg J. Powers 12,810,705 (%)18.9 As Chairman of PCM, Mr. Sherman may be deemed to be a beneficial owner of shares of the Common Stock held in PCM client accounts. As President of PCM, Mr. Powers may also be deemed to be a beneficial owner of shares of the Common Stock held in PCM client accounts. While Mr. Sherman, Mr. Powers and PCM may be deemed to be beneficial owners of shares of the Common Stock held in PCM client accounts, the filing of this Schedule 13D shall not be construed as an admission that such persons are the beneficial owners of any such securities. PCM, Mr. Sherman and Mr. Powers each disclaims ownership of the shares of the Common Stock held in the accounts of PCM clients. (b) PCM currently exercises voting authority over shares of Common Stock held in the accounts of PCM clients that have delegated proxy voting authority to PCM. Such voting authority may be withdrawn by PCM clients at any time. Sole power to vote or direct the vote: Private Capital Management, L.P. 0 Mr. Bruce S. Sherman 0 Mr. Gregg J. Powers 0 Shared power to vote or direct the vote: Private Capital Management, L.P. 9,100,000 Mr. Bruce S. Sherman 9,100,000 Mr. Gregg J. Powers 9,100,000 (Estimated as of 11/1/2005) Sole power to dispose or to direct the disposition: Private Capital Management, L.P. 0 Mr. Bruce S. Sherman 0 Mr. Gregg J. Powers 0 Shared power to dispose or direct the disposition: Private Capital Management, L.P. 12,810,705 Mr. Bruce S. Sherman 12,810,705 Mr. Gregg J. Powers 12,810,705 (c) The following table sets forth the Reporting Persons' transactions in the shares of the Common Stock during the last 60 days: Private Capital Management, L.P. All transactions listed in the schedule below were client directed and PCM did not exercise any investment discretion. Number of Average Transaction Date Shares Price Per Share Effected 9/22/05 300 59.09 Open Market Sale 9/28/05 400 57.93 Open Market Sale 10/05/05 800 57.69 Open Market Sale 10/11/05 500 55.96 Open Market Sale 10/12/05 600 55.05 Open Market Sale 10/12/05 2600 55.29 Open Market Purchase 10/13/05 5000 55.17 Open Market Sale 10/18/05 1100 54.66 Open Market Sale 10/19/05 1400 53.62 Open Market Sale 10/20/05 1600 54.02 Open Market Sale 10/21/05 700 53.18 Open Market Sale 10/24/05 1505 53.88 Open Market Sale 10/25/05 1000 53.86 Open Market Sale 10/26/05 5300 54.00 Open Market Sale 10/27/05 4800 54.02 Open Market Sale 10/28/05 2300 53.90 Open Market Sale 10/31/05 9100 53.43 Open Market Sale Mr. Bruce S. Sherman No Transactions Mr. Gregg J. Powers No Transactions (d) PCM, an investment advisor registered under the Investment Advisors Act of 1940, pursuant to investment advisory contracts with its clients has shared dispositive power over the shares of the Common Stock in the PCM investment advisory accounts of clients. The individual clients, none of whom individually owns beneficially more than 5% of the total class of such securities, have the right to receive or the power to direct the receipt of dividends from, and the proceeds from the sale of the shares of the Common Stock. (e) Not applicable Item 6. Contracts, Arrangements, Understandings or Relationships. None Item 7. Exhibits. Exhibit 1 - Letter to the Board of Directors of of Knight-Ridder, Inc., dated November 1, 2005. After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: November 1, 2005 PRIVATE CAPITAL MANAGEMENT, L.P. By: /s/Bruce S. Sherman Bruce S. Sherman, CEO /s/Bruce S. Sherman Bruce S. Sherman, CEO /s/Gregg J. Powers Gregg J. Powers, President EX-1 2 kri2.txt November 1, 2005 Board of Directors Knight Ridder, Inc. 50 W. San Fernando Street Suite 1500 San Jose, CA 95113 Dear Board Members: I am writing on behalf of Private Capital Management, L.P. ("PCM"), Knight Ridder's largest shareholder. On behalf of its clients, PCM has been an investor in Knight Ridder since April 2000 and its clients currently hold approximately 19% of the Company's outstanding shares. On July 19, 2005, at the invitation of Knight Ridder's Chairman and CEO, Tony Ridder, I addressed the Company's Board on behalf of PCM regarding our concerns with the performance of the Company's stock. As I stated to the Board at that meeting, PCM has long respected Knight Ridder for its distinguished history of serving the public and for the collection of high quality local market newspaper assets that the Company has assembled. However, in light of limited revenue growth across the newspaper industry and the difficulties the Company has faced in realizing the fair value of the Company for its shareholders, we believe the Board should now aggressively pursue the competitive sale of the Company. PCM remains supportive of actions undertaken by the Company following the July 19 Board meeting, so far as they went, to create shareholder value. Nevertheless, as was the case in July and is increasingly the case since, a significant and persistent disparity exists between the fair value of the Company's assets and the trading range of its shares. Since the July 19 Board meeting the Company has raised its dividend; authorized the repurchase of 10,000,000 shares; completed the repurchase of more than 5,000,000 shares; acquired and disposed of a number of newspaper assets; and announced staffing reductions. During that same period the Company's share price has declined by over 14% from $62.23 to $53.38. In our view, the actions taken to date have not adequately addressed a number of significant issues facing the Company, including (i) continuing consolidation among traditional sources of print advertising revenue; (ii) the redirection of advertising dollars to other media; (iii) the Company's unexceptional operating margins; and (iv) the Company's lack of a nationally read paper capable of being leveraged in the online market. In light of these and other factors, we view the best interests of the shareholders as being served by the Board soliciting competitive bids for the Company, either from financial buyers willing to pay fair value or industry participants that would realize synergies and increased market presence through the acquisition of Knight Ridder's highly desirable local newspaper and online advertising assets. We understand through publicly available material that Company management has, on several occasions, determined the Company's break up value to be substantially in excess of the current share price. While we are not putting a specific break up or fair market value on the Company's assets at this time, based on what we observed of other shareholders invited to address the Board at its July meeting, we think that we are not alone in believing that the Company's fair value significantly exceeds its current share price. In the present environment, even considering management's incremental efforts and the Company's top tier assets, the market has persistently failed to recognize the fair value of the Company as it is currently configured and managed. Accordingly, we are calling on the Board to initiate a process to seek competitive offers for the Company and to allow the Company's shareholders to determine whether resulting bids adequately reflect the fair value of the Company's assets. We anticipate that other shareholders would strongly support the Board's efforts to auction the Company at this time. In the absence of such action by the Board, PCM would strongly consider supporting more aggressive efforts that might be initiated by other parties seeking to change the composition of the Board, install new management, acquire a majority of the Company's voting shares, or take other action to maximize shareholder value. As long term supporters of the Company, we thank you for your prompt and thoughtful consideration of this matter. Sincerely, /s/ Bruce S. Sherman Bruce S. Sherman Chief Executive Officer cc: Mr. Tony Ridder -----END PRIVACY-ENHANCED MESSAGE-----