Told you so: Hearst the latest to opt for private
The juiciest announcements always come on a Friday afternoon. Media giant Hearst Corporation has made an offer to acquire the publicly-held shares in Hearst-Argyle television and bring the company under its private control. According to the press release:
Hearst Corporation currently owns approximately 52% of the outstanding Series A Common Stock and 100% of the Series B Common Stock, representing in the aggregate approximately 73% of both the outstanding equity and general voting power of Hearst-Argyle Television.
That means 27% of Hearst-Argyle is outstanding, and the company is offering $23.50 per share in CASH as part of the deal.
This is the latest — and biggest — of the public-to-private moves that I’ve been predicting for the past couple of years, and it’s incredibly smart on the part of Hearst. First, our times call for investment and entrepreneurship, something that is very hard for a publicly-traded company to do. Investors want their quarterly dividends, not have them spent on making the company stronger. Secondly, and not insignificantly, they move out from under the absurd regulations of Sarbanes-Oxley, the well-intentioned mess created by Congress in the wake of the Enron scandal. This act so handcuffs industry that it has become a net liability in the world of business development.
Hearst-Argyle is already a VERY good company, and this will make them even stronger and, I predict, even more competitive in their ability to attack the real disruptions impacting broadcasting’s business model.
(Hat tip to Cory)
