McClatchy Company (MNI)

McClatchy Will Divest Select Papers Outside its Strategic Objectives

SACRAMENTO, CA, and SAN JOSE, CA. March 13, 2006 – The McClatchy Company (NYSE: MNI) of Sacramento, CA and Knight-Ridder, Inc. (NYSE: KRI) of San Jose, CA today announced they have signed a definitive agreement under which McClatchy will acquire Knight Ridder in a transaction valued at $67.25 per share consisting of $40.00 in cash and a fixed fraction of .5118 of a Class A McClatchy share. The transaction values Knight Ridder at approximately $6.5 billion, including approximately $2.0 billion in assumed debt at closing.

The expanded McClatchy Company will have 32 daily newspapers and approximately 50 non-dailies after the planned sale of 12 Knight Ridder papers. McClatchy’s dailies will then have a combined daily circulation of about 3.2 million, making it the nation’s second largest newspaper company measured by daily circulation. McClatchy stated that it would have had 2005 pro forma revenues of $2.83 billion and combined pro forma EBITDA of $754 million assuming full year ownership of all retained papers, after planned divestitures which contribute $219 million of EBITDA, and before cost synergies. The transaction is expected to be accretive to free cash flow (net income after adding back depreciation and amortization, minus capital expenditures) in the mid-teens percent and dilutive to GAAP earnings per share in the mid-single digit range in the first year after closing, becoming EPS accretive by 2008.

As a result, McClatchy will own leading newspapers in many of the fastest growing markets nationwide. Papers to be added through this transaction include the Miami Herald, Kansas City Star, Fort Worth Star-Telegram and Charlotte Observer. They will join McClatchy’s 12 papers serving cities like Minneapolis, MN; Sacramento, CA; and Raleigh, NC. In addition, McClatchy combined with Knight Ridder will have an expanded network of valuable internet assets including the national Real Cities network, a one-third stake in the leading jobs site CareerBuilder, and other attractive interactive businesses.

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