Merrill Lynch, in a report by star analyst Lauren Rich Fine (pictured), says McClatchy is the front-runner in the three-way contest to acquire newspaper publisher Knight Ridder, owner of the Mercury News, Contra Costa Times and 30 other dailies. KR’s papers in Northern California, Minnesota and the Carolinas would be attractive to McClatchy, which also has properties in those areas such as the Sacramento Bee. “Based on trade speculation on Tuesday, we believe a successful McClatchy bid is more probable but is far from a slam dunk,” Fine wrote in the report, according to E&P. The deadline to submit bids is Thursday (March 9). [Who is Lauren Rich Fine? An AJR profile] [Philladelphia newsman spots glaring error in Fine’s analysis] [Guild insists it is still a player in KR sale] [Newspaper industry watches Knight Ridder auction] [Bidder who dropped out: Newspaper industry is too scary] [NYT: Are papers about to land or take off?]