Hearst Declines to Raise Offer for Hearst-Argyle Shares

At the last minute, Hearst said Friday that it wouldn't improve its $23.50-per-share bid to acquire the remaining 48% of Hearst-Argyle Television it doesn't already own.

Shareholders had previously turned down that offer, but analysts thought it was just a routine bit of gamesmanship -- bid low, and hope -- and that Hearst would sweeten its offer. (Hearst-Argyle has been trading at around $25 per share.) Hearst had until Oct. 12 to respond, and at the worst, it appeared that most analysts thought Hearst would just extend the offer.

Barry Lucas of asset-management firm Gabelli & Co. said earlier on Friday, "The initial bid was was not fair value as we see it," and he had predicted that Hearst-Argyle deserved "another kiss."

But he also said Hearst-Argyle's original lowball offer may have meant that Hearst knew something others didn't. Nonetheless, the surprising pullout may be history soon enough. Nothing stops Hearst from offering again, perhaps very soon.

The takeover attempt, started in August, is part of a trend in which companies with print and television assets are trying to rearrange their businesses as print gets hammered by advertisers, subscribers and Wall Street. Belo, for example, is in the midst of splitting its newspaper and television holdings into two separate companies, and others are considering following suit.