business

A spokesman for a group of Twin Cities investors interested in buying the St. Paul Pioneer Press said Thursday that his associates are still hoping that the McClatchy Co. holds an auction for the newspaper.

John Wodele's comments came on the heels of a Los Angeles Times report that Dean Singleton's MediaNews Group had offered $1 billion for the Pioneer Press and three California papers. Wodele also questioned whether the reported bid was accurate.

"A billion dollars for those four papers?" asked John Wodele, spokesman for a group of St. Paul investors interested in acquiring the Pioneer Press. "If they've got a billion-dollar offer for those four papers [the Pioneer Press, the Monterey Herald, the San Jose Mercury News and the Contra Costa Times], then take the money and run.

"But the Monterey Herald has a circulation of 38,000," Wodele added. "I talked to a few people, and we agreed that you have to question the authenticity of that story."

McClatchy intends to unload the papers -- and eight others it is acquiring in its pending purchase of Knight Ridder Inc. -- while retaining 20 Knight Ridder papers.

Wodele said he understands why Singleton, who already owns a number of California newspapers, might pay a premium to get more. "But when you throw in the Pioneer Press it confuses things." In the meantime, he added, McClatchy, which owns the Star Tribune, won't talk to his group, "so we don't know what's going on. It's frustrating."

McClatchy and MediaNews hoped to complete their deal this week, but a number of details remain to be ironed out, and sources familiar with the talks told the Times that a final deal was not a certainty. The principals have consistently refused to comment.

Wodele said he was told that "there was a reasonable chance for an auction of sorts for the Pioneer Press, but I don't know what was meant by 'reasonable.' "

In his attempted purchase of the three California newspapers, Singleton is likely to be joined by two partners -- industry giant Gannett Co. and privately held Stephens Media Group, the Times reported Thursday.

Under a 1999 alliance with Gannett and Stephens known as the California Newspapers Partnership, MediaNews is required to give its partners the option to participate in any newspaper acquisitions in California. The partnership currently owns 23 papers in the state.

Gannett previously had been described by industry observers as sitting out the bidding for the papers.

The union that represents employees in San Jose, Monterey and St. Paul is alarmed by a prospective deal between MediaNews and McClatchy. The Newspaper Guild-Communications Workers of America has been supporting the effort of Los Angeles billionaire Ron Burkle to buy all 12 papers on the block.

Singleton's flagship paper, the Denver Post, said this week it will pare 25 newsroom jobs -- 8 percent of its news staff -- by offering buyouts.

That concerned Newspaper Guild President Linda Foley. "I'm hearing about possible cuts at other [Singleton] properties. If that's true, then [MediaNews is] stretched very thin. I question whether they can do the acquisition."

Meanwhile on Thursday, Moody's Investors Service cut its debt ratings for Knight Ridder and McClatchy to junk status, citing McClatchy's acquisition of its bigger rival. Both were cut to "Ba1" from the lowest investment-grade rating of "Baa3," Reuters reported.

The Los Angeles Times contributed to this report. Deborah Caulfield Rybak • 612-673-4996