NEW YORK: Hearst-Argyle TV today announced that it retained Morgan Stanley as financial advisor on a proposal from Hearst Corp. to acquire the spun-out broadcast division. Privately owned Hearst Corp. made an unsolicited offer March 25 to buy the 33 percent share of Hearst-Argyle it did not already own. Hearst-Argyle (NYSE: HTV) consists of 29 TV stations. The parent corp., one of the world’s largest family-owned media companies, offered $4 per outstanding A share of HTV, which was trading at around $2 at the time of the offer.
HTV immediately formed a special committee of board members to consider the offer, which has not yet been formally tendered. Simpson Thacher & Bartlett LLP is providing legal advice to the special committee.
On April 1, the law offices of Brodsky & Smith LLC of Bala Cynwyd, Penn., said it was investigating the legal ramifications of the proposal and seeking shareholder participation. Even with the current 100 percent premium in the current offer, the firm said “it does not appear to be fair to Hearst-Argyle shareholders given that the company’s stock was trading at over $23 a share in September, 2008, and, as recently as January 2009, the stock traded at $6.50--a $2.50 a share more than the current Hearst offer.”
HTV’s stock has indeed slid, but so has everything else in the market. Media companies have been hit particularly hard because of their heavy dependence on the auto industry. Hearst-Argyle posted a net loss of nearly $517 million last year after writing down nearly $1 billion on assets, investments and severance.
Hearst Corp. said Hearst-Argyle would be more likely to weather the economic downturn as a wholly owned subsidiary. Shares reached $4.50 in today’s trading. -- Deborah D. McAdams
