Argyle Stockholders Approve Combination With the Broadcast Group of The Hearst Corp.SAN ANTONIO--(BUSINESS WIRE)--Aug. 28, 1997--Argyle Television Inc. (Nasdaq:ARGL) announced that the combination of the Broadcast Division of The Hearst Corp. and Argyle Television was approved by its stockholders Thursday. The stockholders of Argyle approved the transactions creating Hearst-Argyle Television Hearst-Argyle Television, Inc., is a broadcasting company in the United States. Hearst-Argyle is majority-owned by the New York City-based Hearst Corporation, and holds joint ventures in television production with NBC Universal Television Distribution, has an Internet partnership with 89.7 percent of the outstanding shares of common stock voting in favor, and a total of 20 shares (or less than 0.0002 percent) voting against the transaction. As part of this transaction, which is expected to be completed on Aug. 29, Argyle's name will be changed to Hearst-Argyle Television Inc. and its stock symbol will change to HATV. Commenting on this milestone event, Argyle Chairman and Chief Executive Officer Bob Marbut said: ``The overwhelming vote by our shareholders to support the merger with Hearst Broadcasting sets the stage for Hearst-Argyle Television to become a major player in the television-station business. I want to thank the shareholders for their support during the creation and building of Argyle Television, and I want to thank the people of Argyle for making this possible.'' In the merger effecting the combination, the Argyle stockholders may elect to receive for each outstanding share of Argyle common stock held (i) $26.50 in cash; (ii) one share of Hearst-Argyle Series A common stock; or (iii) a ``mixed consideration'' of $13.25 in cash and one-half share of Hearst Argyle Series A common stock. The cash and stock elections are subject to proration Proration A situation during a corporate action in which the available cash or shares are not sufficient to satisfy the offers tendered by shareholders. Therefore, a proportion of both cash and shares is granted for each offer tendered. in the event the aggregate cash under all elections exceeds approximately $160 million or is less than $100 million. Assuming the minimum cash election, the total number of shares of Hearst-Argyle Television Series A common stock to be held by former Argyle stockholders will be 8.3 million (approximately 17.3 percent of the total number of common shares to be outstanding). In the transaction, The Hearst Corp. will be issued 38.6 million shares of Hearst-Argyle Television Series B common stock. Additionally, The Hearst Corp. will be issued 1 million shares of Hearst-Argyle Television Series B common stock in consideration for the transfer of approximately $36 million of surplus pension assets to certain newly formed Hearst-Argyle Television defined benefit plans Defined benefit plan A pension plan obliging the sponsor to make specified dollar payments to qualifying employees at retirement. The pension obligations are effectively the debt obligation of the plan sponsor. Related: Defined contribution plan , the net effect of which transfer Argyle estimates will reduce future annual station operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. associated with such plans by $3.8 million. As a result of these issuances, The Hearst Corp. will own a total of 39.6 million shares of Hearst-Argyle Television common stock (approximately 82.7 percent of the total number of common shares to be outstanding). Assuming the minimum cash election and based on the number of shares to be issued to The Hearst Corp., the total number of outstanding shares of common stock of Hearst-Argyle Television will be approximately 47.9 million, and the total amount of long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. (including current portions) will be approximately $605 million. Hearst-Argyle also will have outstanding preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. that is redeemable under certain circumstances for a total redemption price Redemption price See: Call price redemption price 1. The price at which an open-end investment company will buy back its shares from the owners. In most cases, the redemption price is the net asset value per share. 2. of approximately $21.9 million. On a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma basis, and adjusting for the pension-asset transfer, 1996 broadcast cash flow for Hearst- Argyle Television was approximately $163 million. The Hearst-Argyle television stations will reach approximately 11.6 percent of U.S. television households and constitute the third- largest, non-network-owned television group in the United States in terms of audience delivered. Upon completion of the transaction, Hearst-Argyle Television Inc. will own and operate network-affiliated television stations WCVB-TV, the ABC ABC in full American Broadcasting Co. Major U.S. television network. It began when the expanding national radio network NBC split into the separate Red and Blue networks in 1928. affiliate in Boston; WTAE-TV, the ABC affiliate in Pittsburgh; WBAL-TV, the NBC NBC in full National Broadcasting Co. Major U.S. commercial broadcasting company. It was formed in 1926 by RCA Corp., General Electric Co. (GE), and Westinghouse and was the first U.S. company to operate a broadcast network. affiliate in Baltimore; WLWT-TV, the NBC affiliate in Cincinnati; WISN-TV, the ABC affiliate in Milwaukee; KMBC-TV, the ABC affiliate in Kansas City, Mo.; KOCO-TV, the ABC affiliate in Oklahoma City; WNAC-TV, the Fox affiliate in Providence, R.I.; WDTN-TV, the ABC affiliate in Dayton, Ohio; KITV-TV, the ABC affiliate in Honolulu; WAPT-TV, the ABC affiliate in Jackson, Miss.; and KHBS-TV, the ABC affiliate in Fort Smith, Ark., and its satellite KHOG-TV, the ABC affiliate in Fayetteville, Ark. Hearst-Argyle Television also will own and operate Hearst-Argyle Broadcast Productions, which is engaged in the production of programming for cable networks and broadcast stations. Hearst- Argyle also will provide management services for WWWB, the WB affiliate in Tampa, Fla.; WPBF-TV, the ABC affiliate in West Palm Beach, Fla.; KCWB-TV, the WB affiliate in Kansas City, Mo.; and two radio stations (WBAL-AM and WIYY-FM, Baltimore) -- these managed stations (other than KCWB-TV) will continue to be owned by The Hearst Corp. In accordance with the order of the Federal Communications Commission Federal Communications Commission (FCC), independent executive agency of the U.S. government established in 1934 to regulate interstate and foreign communications in the public interest. approving the Hearst transaction, WNAC WNAC Women Nationally Active for Christ (Antioch, TN) in Providence will be divested because of an overlap with WCVB WCVB Warren County Visitors Bureau (Pennsylvania) in Boston, and WDTN in Dayton will be divested because of an overlap with WLWT in Cincinnati. Hearst-Argyle Television's Series A common stock will trade on the Nasdaq National Market under the symbol HATV. CONTACT: Argyle Television Inc., San Antonio Bob Marbut, 210/828-1700 |
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