40/29 parent company target of takeover
by March 25, 2009 2:59 pm 154 views
The largest shareholder of the company that owns the KHBS-KHOG 40/29 television station operating in the Fort Smith and Northwest Arkansas markets announced Wednesday it will seek to acquire 100% ownership.
Hearst Corp., a New York-based media company, now owns about 67% of the “A” shares of Hearst-Argyle Corp., and 100% of the company’s “B” shares. Hearst-Argyle is the owner of 40/29. Following a successful transaction, Hearst-Argyle would become a wholly-owned subsidiary of Hearst.
Hearst is offering $4 per share.
Media markets made volatile by advertising revenue declines have seen Hearst-Argyle shares swing from a 52-week high of $24.50 to a 52-week low of $1.38. The shares traded around $4 at the time of the Hearst announcement (Mar. 25).
The tender offer (effort to obtain all the shares) is expected to begin in mid-April. Hearst attempted a similar takeover in September 2007, but not enough shares were tendered to satisfy Hearst Corp.’s terms.
Hearst Corp. CEO Frank Bennack Jr. said two primary factors have caused Hearst to make the second attempt. One is that Private Capital Management, a large shareholder with 7 million Hearst-Argyle shares, is supportive of the Hearst price of $4 per share. Also, Bennack said, Hearst-Argyle needs the financial support of Hearst Corp. to survive the tough economic times.
“We believe that if Hearst-Argyle were a wholly-owned subsidiary of Hearst it would more readily be able to navigate the troubled waters in which we find ourselves,” Bennack noted in a letter to the Hearst-Argyle board of directors.
Hearst Corp. owns 15 daily and 49 weekly newspapers, including the financially troubled San Francisco Chronicle. Hearst also owns almost 200 magazines, including Good Housekeeping and O, The Oprah Magazine. Hearst also owns 29 television stations through Hearst-Argyle which reach a combined 18% of U.S. viewers.