Hearst Corp. said it will offer to buy the one-third stake in Hearst-Argyle Television Inc. that it doesn’t already own in a deal that values the station owner at $375 million, less than a fifth of the price it offered nearly two years ago, according to a story in the Wall Street Journal.
Hearst Corp. announced that it will offer to buy the one-third stake in Hearst-Argyle Television Inc. that it doesn’t already own, according to a story in the Wall Street Journal.
The story, written by Nat Worden, says the offer values the station group at $375 million, less than one-fifth of the price the company offered nearly two years ago.
The bid could end a tug of war that Hearst has with its broadcast television subsidiary and its shareholders that began when it offered to buy them out at $23.50 a share in 2007. Back then, Hearst-Argyle urged shareholders to reject the bid, saying it was inadequate and not in the best interests of Hearst-Argyle Television stockholders.
The latest bid comes amid a long advertising slump that has hit newspapers, TV and Internet companies and that has intensified as the recession has deepened.
Frank Bennack, CEO of Hearst, wrote to Hearst-Argyle’s board that he’d decided to pursue the acquisition again after stress in financial markets concentrated Hearst’s focus on the company’s capital structure, its heavy debt load and its ability to meet its obligations on acceptable terms, the story says.
He said in a letter to shareholders that if Hearst-Argyle were a wholly owned subsidiary of Hearst it would be more easily able to navigate the troubled waters in which the company finds itself.
Hearst said that hedge fund Private Capital Management, which led shareholder opposition to the 2007 bid, supports the new offer.
WSJ Online subscribers may read the full story here.