Hearst Corp. Launches Takeover Bid of TV Unit
August 31, 2007
Hearst Corp. announced an unsolicited offer to buy most of the shares of Hearst-Argyle Television Inc. it doesn’t already own, but at least one significant shareholder says the offer of $23.50 per share—a 15 percent premium over the stock’s price at the time of the offer—should be rejected.
Hearst-Argyle Television owns 26 television stations and operates three more. Hearst Corp. now owns 73 percent of Hearst-Argyle Television.
The corporation said it will file relevant SEC documents in September.
Marathon Partners, a New York-based investment group that owns 90,000 shares of Hearst-Argyle Television, sent a letter to the company’s Board of Directors urging them to resist the sale.
"It is absolutely clear that the current offer does not fairly compensate the shareholders of HTV for the unique and valuable assets the Company controls," wrote Mario Cibelli, Marathon’s managing member of Marathon. “I strongly urge you to reject the $23.50 offer outright. From my viewpoint, this is a highly opportunistic move by Hearst Corporation that offers no compelling call to action for HTV owners. It is absolutely clear that the current offer does not fairly compensate the shareholders of HTV for the unique and valuable assets the Company controls."
Hearst-Argyle Television set up a committee of its Board of Directors to examine the deal and make recommendations to stockholders.