Conversion of Shares of Knight Ridder Common Stock in Merger of Knight Ridder into McClatchy
The following table summarizes the per-share consideration paid by The McClatchy Company (NYSE:MNI) to Knight Ridder shareholders:
Each share of Knight Ridder common stock (KRI) was converted into the right to receive .5118 a share of McClatchy Class A Common Stock (MNI) and $40.00 in cash.
MNI shares valued at closing price on June 27, 2006, of $39.03:
| Value of .5118 MNI shares on closing date: | $19.98 |
| Cash paid for each KRI share: | $40.00 |
| Total consideration for each KRI share:1 | $59.98 |
Shareholders can refer to the Prospectus/Proxy Statement/Information Statement included in McClatchy’s Registration Statement on S-4 filed with the SEC on May 10, 2006, and available through www.mcclatchy.com for a discussion of the material U.S. federal income tax consequences of the merger to former Knight Ridder shareholders.
Example of Tax Reporting of the Knight Ridder/McClatchy Share Conversion
1Based on the closing price of MNI on June 27, 2006. The merger became effective at 4:01 p.m. Eastern Daylight Time on June 27, 2006.
FORMER KNIGHT RIDDER SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE SPECIFIC TAX CONSEQUENCES OF THE MERGER TO THEM, INCLUDING APPLICABLE FEDERAL, STATE AND LOCAL TAX CONSEQUENCES AND NON-U.S. TAX CONSEQUENCES.
About The McClatchy Company
On June 27, 2006, The McClatchy Company acquired Knight-Ridder, Inc. At the time, Knight Ridder published 32 daily newspapers in 29 U.S. markets, with a circulation of 3.4 million daily and 4.5 million Sunday, along with a variety of investments in internet and technology companies.
As part of that announcement, McClatchy said it planned to sell 11 of the acquired newspapers that do not fit with the company's longstanding operating strategies and acquisition criteria, and to sell the St. Paul Pioneer Press due to anticipated antitrust concerns involving McClatchy's Minneapolis Star Tribune. On June 27, 2006, McClatchy completed the sales of the Duluth (MN) News Tribune; the Grand Forks (ND) Herald; the Aberdeen (SD) American News; and the Ft. Wayne (IN) News-Sentinel and a 75% interest in the Fort Wayne Joint Operating Agency.
Upon completion of the remaining divestitures, McClatchy will include 32 daily newspapers and approximately 50 non-dailies. Papers added through this transaction include The Miami Herald, The Kansas City Star, Fort Worth Star-Telegram and The Charlotte Observer. They will join McClatchy's 12 papers serving cities including Minneapolis, MN; Sacramento, CA; and Raleigh, NC. In addition, McClatchy combined with Knight Ridder has an expanded network of valuable internet assets.
SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS
Statements in this press release regarding the transactions between McClatchy and each of MediaNews, Hearst, Sound Publishing Holdings, Inc., and The Wilkes-Barre Publishing Company Inc., the expected timetable for completing the remaining transactions, future financial and operating results, benefits and synergies of the transactions, future opportunities for the company and any other statements about management's future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words "believes," "plans," "anticipates," "expects," estimates and similar expressions) should also be considered to be forward- looking statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including: the ability to consummate the remaining transactions, the ability of McClatchy to successfully integrate Knight Ridder's operations and employees; the ability to realize anticipated synergies and cost savings; and the other factors described in McClatchy's Annual Report on Form 10-K for the year ended December 25, 2005 and the final Prospectus/Proxy Statement/Information Statement contained in McClatchy's Registration Statement on Form S-4 (Registration No. 333-133321). McClatchy disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this document.
