Hearst to Make Offer for Hearst-Argyle Television

The broadcast and publishing company Hearst Corp. launched a second takeover attempt for Hearst-Argyle Television Inc. on Wednesday, saying it will offer stockholders $4 per share for the stake it doesn't already own.

Hearst said the offer will come mid-April. The price represents a 91 percent premium over Hearst-Argyle's closing shares price Tuesday, but is just 17 percent of the $23.50 per share offer the company made in 2007.

Hearst, which already owns 67 percent of the company's class A shares and all of its class B shares, said it will look to buy up a majority of the remaining class A stock. Once that is complete, the class B shares can be converted to class A, giving Hearst a 90 percent stake and allowing it to finish the deal with a "short-form" cash merger.

The announcement nearly doubled Hearst-Argyle's stock. Shares closed up $1.94, or 93 percent, at $4.03

Hearst, a privately held company with a stable of newspaper properties that includes the Houston Chronicle and the San Francisco Chronicle, made a similar bid in 2007. It offered $600 million in cash for the outstanding shares, but a committee of Hearst-Argyle's board urged stockholders to reject the deal.

In the meantime, however, the recession has dealt a blow to Hearst-Argyle, which owns and operates 29 television stations. The company reported a steep loss for the fourth quarter because of a write-down on the value of its assets and said it would suspend its dividend.

"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," Hearst Chief Executive Frank Bennack said in a letter to the company's board Wednesday.

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