Arbs Lay Off Knight-Ridder

Is Knight Ridder(KRI Quote) a good merger arbitrage play? Several traders at hedge funds doubt the deal will materialize and say they're in no hurry to take a bet.

Shares of the newspaper publisher rose 1% to $60.93 Thursday after The Wall Street Journal reported that three private equity firms, Blackstone Group, Providence Equity Partners and Kohlberg Kravis Roberts, were considering a joint bid for the company.

The muted reaction partly reflects Knight-Ridder's 15% run since late October, when several large shareholders started agitating for a sale of the company. But the current price is 13% below the 52-week high of just below $70, hit in early March. ...